EXHIBIT 8
ALSTON & BIRD LLP
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309-3424
404-881-7000
Fax: 404-881-4777
www.alston.com
Pinney L. Allen Direct Dial: 404-881-7485
January 22, 1998
Highwoods Properties, Inc.
3100 Smoketree Court, Suite 600
Raleigh, North Carolina 27604
Re: $1,250,000,000 Aggregate Offering Price of Securities of
Highwoods Properties, Inc. and Highwoods/Forsyth Limited
Partnership
Ladies and Gentlemen:
In connection with the registration statement on Form S-3 File No.
333-31181, as in the form filed as of September 18, 1997, and updated on
September 23, 1997, and January 22, 1998, (Registration Statement), you have
requested our opinion concerning certain of the federal income tax consequences
to the Company of its election to be taxed as a real estate investment trust
("REIT") under Sections 856 through 860 of the Internal Revenue Code of 1986, as
amended (the "Code").
This opinion is based solely on various assumptions and facts as set
forth in the Registration Statement and is conditioned upon certain
representations made by the Company as factual matters through a certificate of
an officer of the Company (the "Officer's Certificate") attached hereto and made
a part hereof. We have made no independent inquiry as to the factual matters set
forth herein. In addition, we have examined no documents other than the
Registration Statement for purposes of this opinion and, therefore, our opinion
is limited to matters determined through an examination of such document and the
factual matters set forth in the Officer's Certificate.
In rendering the opinions set forth herein, we have assumed the
authenticity of all documents submitted to us as originals, the genuineness of
all signatures thereon, the legal capacity of natural persons executing such
documents and the conformity to authentic original documents of all documents
submitted to us as copies.
We are opining herein as to the effect on the subject transaction only
of the federal income tax laws of the United States and we express no opinion
with respect to the applicability thereto, or the effect thereon, of other
federal laws, the laws of any other
1211 East Morehead Street 3605 Glenwood Avenue 601 Pennsylvania Avenue, N.W.
P. O. Drawer 34009 P. O. Drawer 31107 North Building, Suite 250
Charlotte, NC 28234-4009 Raleigh, NC 27622-1107 Washington, DC 20004-2601
704-331-6000 919-420-2200 202-508-3300
Fax: 704-334-2014 Fax: 919-881-3175 Fax: 202-508-3333
Highwoods Properties, Inc.
January 22, 1998
Page 2
jurisdiction, the laws of any state or as to any matters of municipal law or the
laws of any other local agencies within any state.
Based solely on the facts in the Registration Statement and the
Officer's Certificate, we are of the opinion that the Company has been organized
and has operated in conformity with the requirements for qualification and
taxation as a REIT under the Code for its taxable years ended December 31, 1994
through 1996, and that the Company is in a position to continue its
qualification and taxation as a REIT within the definition of Section 856(a) of
the Code for the taxable year that ended December 31, 1997 and the taxable year
that will end December 31, 1998. With respect to 1997 and 1998, we note that the
Company's status as a REIT at any time during such years is dependent, among
other things, upon the Company meeting the requirements of Sections 856 through
860 of the Code throughout each of such years and for each year as a whole.
Accordingly, because the Company's satisfaction of such requirements will depend
upon future events, including the precise terms and conditions of proposed
transactions, and the final determination of operational results, it is not
possible to assure that the Company will satisfy the requirements to be a REIT
during the taxable year that ended December 31, 1997, or the taxable year that
will end December 31, 1998.
In addition, we have participated in the preparation of the material
under the heading "Federal Income Tax Considerations" of the Registration
Statement and we are of the opinion that the federal income tax treatment
described therein is accurate in all material respects.
This opinion is based on various statutory provisions, regulations
promulgated thereunder and interpretations thereof by the Internal Revenue
Service and the courts having jurisdiction over such matters, all of which are
subject to change either prospectively or retroactively. Also, any variation or
difference in the facts from those set forth in the Registration Statement or
the Officer's Certificate may affect the opinions stated herein.
This opinion is furnished only to you, is solely for your use in
connection with the Registration Statement, and is limited to the specific
matters covered hereby and should not be interpreted to imply that the
undersigned has offered its opinion on any other matter. This opinion may be
relied upon only by the party to whom it is addressed and may not be quoted,
circulated, or used for any other purpose without our prior written
Highwoods Properties, Inc.
January 22, 1998
Page 3
consent. We, however, hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to the use of our name under the caption
"Legal Matters" in the Registration Statement.
Very truly yours,
By: /s/ Pinney L. Allen
-------------------
Pinney L. Allen
CERTIFICATE
I, MACK D. PRIDGEN, III, in my capacity as Vice-President and General
Counsel of Highwoods Properties, Inc. (the "Company"), do hereby certify, to the
best of my knowledge and belief after making appropriate inquiries with respect
to all matters set forth below, as follows:
1. That I am a Vice-President and the General Counsel of the Company in
the state of North Carolina;
2. That in such capacity, I have access to relevant information
regarding each of the factual matters set forth below;
3. That for purposes of this Certificate,
(a) "Affiliated Partnerships" means AP-GP Southeast Portfolio
Partners, L.P., Highwoods/Tennessee Holdings, L.P., AP Southeast Portfolio
Partners, L.P., and Highwoods/Florida Holdings, L.P., collectively;
(b) "Code" means the Internal Revenue Code of 1986, as
amended;
(c) "Foreclosure Property" means real property (including
interests in real property), and any personal property incident to such real
property, acquired by the real estate investment trust as a result of such trust
having bid in such property at foreclosure, or having otherwise reduced such
property to ownership or possession by agreement or process of law, after there
was default (or default was imminent) on a lease of such property or on an
indebtedness that such property secured;
(d) "Garcia Transaction" means the transaction that will close
in 1998 pursuant to the terms and conditions set forth in the Master Acquisition
Agreement, dated December 21, 1997, by and among Highwoods Properties, Inc.,
Highwoods/Forsyth Limited Partnership, Martin L. Garcia, the Garcia Partnerships
(i.e., Pinellas Bay Vista Partners, Ltd., BDBP, Ltd., Downtown Clearwater Tower,
Ltd., Cross Bayou, Ltd., Interstate Business Park, Ltd., Pinellas Northside
Partners, Ltd., Pinellas Pinebrook Partners, Ltd., and Sisbros, Ltd.), and the
Garcia Corporations (i.e., Westshore Square, Inc., Garcia Property Management,
Inc., Garcia, Meyers Co., and Garcia Enterprises of Tampa, Inc.), which provides
that (1) the Garcia Partners (as defined in the Master Acquisition Agreement)
will sell their interests in the Garcia Partnerships to Highwoods/Forsyth
Limited Partnership; (2) Garcia Enterprises of Tampa, Inc. will sell its
ownership interest in the Properties (as defined in the Master Acquisition
Agreement) to Highwoods/Forsyth Limited Partnership; and (3) Highwoods/Forsyth
Limited Partnership, Martin L. Garcia, the Garcia Partnerships, and the Garcia
Corporations will combine business operations;
(e) "Highwoods Services" means Highwoods Services, Inc., a
North Carolina corporation, the equity ownership of which is owned 99% by
Highwoods/Forsyth Limited Partnership and .5% each by Ronald P. Gibson and
Edward J. Fritsch;
(f) "Independent Contractor" means any person who does not
own, directly or indirectly, more than 35% of the shares in the REIT, and, if
such person is a corporation, not more than 35% of the total combined voting
power of whose stock (or 35% of the total shares of all classes of whose stock),
or, if such person is not a corporation, not more than 35% of the interest in
whose assets or net profits is owned, directly or indirectly, by one or more
persons owning 35% or more of the shares in the REIT;
(g) "Operating Partnership" means Highwoods/Forsyth Limited
Partnership, a North Carolina partnership of which the Company is the sole
general partner with an approximate 82% ownership interest, including a 1%
general partnership interest and an 81% limited partnership interest, and
various others (including officers and directors of the Company) are the
remaining limited partners with an approximate 18% aggregate interest;
(h) "Operating Partnership Agreement" means the First Amended
and Restated Agreement of Limited Partnership of Highwoods/Forsyth Limited
Partnership, dated June 14, 1994, as amended;
(i) "Prohibited Transaction" means a sale or other disposition
of property, other than foreclosure property, that is stock in trade of the
taxpayer or other property of a kind which would properly be included in the
inventory of the taxpayer if on hand at the close of the taxable year, or
property held by the taxpayer primarily for sale to customers in the ordinary
course of trade or business;
(j) "Qualified REIT Subsidiary" means (1) any corporation in
which a real estate investment trust owned stock during any taxable year ended
on or before December 31, 1997, if 100% of the stock of such corporation was
held by the real estate investment trust at all times during the period such
corporation was in existence and (2) any corporation in which a real estate
investment trust may own stock after the taxable year ended December 31, 1997,
if 100% of the stock of such corporation is held by the real estate investment
trust;
(k) "Real Estate Assets" means real property (including
interests in real property and interests in mortgages on real property) and
shares (or transferable certificates of beneficial interest) in other real
estate investment trusts that meet the requirements of Code Sections 856 through
860;
(l) "Registration Statement" means the Form S-3, File No.
333-31183, as in the form filed as of September 18, 1997, and updated on
September 28, 1997, and January 22, 1998;
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(m) "REIT" means a real estate investment trust;
(n) "REIT Election" means an election to be taxed as a REIT
under Code Section 856(c)(1);
(o) "Service" means the Internal Revenue Service; and
(p) "Subsequent ACP Mergers" means (1) the merger of
Associated Capital Equities Corp. II with and into Highwoods Properties, Inc.
pursuant to Articles of Merger, dated October 7, 1997; (2) the merger of Euro
II, Inc., with and into Highwoods/Florida GP Corp. pursuant to Articles of
Merger, dated November 20, 1997; (3) the merger of Comeau Building, Inc.,
ACP-Atrium CG, Inc., ACP-Dadeland, Inc., ACP-F, Inc., ACP-Lakeview, Inc.,
ACP-Lee Road, Inc., ACP-L, Inc., ACP Pine Street GP, Inc., ACP-Tampa Bay, Inc.,
ACP-W, Inc., ACP-Eastpointe, Inc., JH Property Investments, Inc., ACP-5400,
Inc., ACP-C, Inc., ACP-Grand, Inc., ACP-I, Inc., ACP-Southpoint, Inc., ACP
Florida Office Properties, Inc., ACP-Fireman, Inc., and ACP Venture Corp. with
and into Highwoods Properties, Inc. pursuant to Articles of Merger, dated
November 20, 1997; (4) the merger of 319 Clematis Associates, Ltd., ACP-Atrium
CG, Limited Partnership, ACP-Dadeland, Limited Partnership, ACP-F, Limited
Partnership, ACP-Lakeview, Limited Partnership, ACP-Lee Road, Limited
Partnership, ACP-L, Limited Partnership, ACP Pine Street, Limited Partnership,
ACP-Tampa Bay, Limited Partnership, ACP-W, Limited Partnership, Eastpointe
Towers Associates, Ltd., Eller Drive Limited Partnership, ACP Venture I Limited
Partnership, SCG-ACP Master Limited Partnership, SCG-ACP I Limited Partnership,
SOFI-IV Tampa Office Limited Partnership, ACP-5400, Limited Partnership, ACP-C,
Limited Partnership, ACP-Grand, Limited Partnership, ACP-I, Limited Partnership,
SOFI-IV Tallahassee Office Limited Partnership, ACP-Southpoint Limited
Partnership, ACP-Reflections, Limited Partnership, and One Winter Park
Associates with and into Highwoods/Florida Holdings, LP, pursuant to Articles of
Merger, dated December 5, 1997; and (5) the merger of The Shoppes of
Interlachen, Inc. with and into Florida Transition Co. II;
4. That I have consulted with other employees and officers of the
Company regarding the matters set forth below and such persons have agreed in
all respects with the representations made below;
5. That, except as otherwise noted, all representations made below are
true and complete for each of the taxable years ended December 31, 1994 through
December 31, 1997, and through the date hereof; and that I have no reason to
believe that such representations will not continue to be true for the taxable
year that will end December 31, 1998;
6. That the Company has operated and will continue to operate in
accordance with Maryland law, its articles of incorporation, and its bylaws and
in accordance with the statements and representations made in the Registration
Statement;
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7. That the Operating Partnership has operated and will continue to
operate in accordance with North Carolina law, the Operating Partnership
Agreement, and the statements and representations made in the Registration
Statement;
8. That I am a licensed attorney familiar with the requirements for
qualification as a REIT under applicable provisions of the Code, that all such
requirements have been satisfied for the Company's taxable years ended December
31, 1994 through December 31, 1997 (except for the election to be taxed as a
REIT for the taxable year ended December 31, 1997, which will be made on the
federal income tax return for such taxable year as noted in Item 9 below); that
I have no reason to believe that such requirements will not continue to be
satisfied in the taxable year that will end December 31, 1998; and that I have
exercised ordinary business care and prudence to attempt to satisfy such
requirements and I have advised Alston & Bird LLP of any matter of which I am
aware that could cause reason for concern as to whether those requirements have
been or will be satisfied;
9. That the Company has filed an election, in accordance with
applicable Code requirements, to be taxed as a REIT with each of its tax returns
for the periods ended December 31, 1994 through December 31, 1996, and has not
taken any action to terminate such election; that the Company will file an
election, in accordance with applicable Code requirements, to be taxed as a REIT
with its tax return for the period ended December 31, 1997, and has not taken
any action to prevent such election; that I have no reason to believe that the
Company will not continue to file such election or that it will take any action
to terminate such election for the period that will end December 31, 1998; and
that the Company has received no notification formally or informally from the
Service or any other person that such election may not be valid or has been
revoked or withdrawn in any respect;
10. That the Company is and will continue to be managed by one or more
of its directors who have exclusive authority over the management of the
Company, the management of its officers, and the management and disposition of
the Company's property;
11. That the beneficial ownership of the Company is and will continue
to be evidenced by transferable shares; and that there are no restrictions on
the transferability of such shares either in the Articles of Incorporation or in
any agreement to which the Company is a party, other than the restrictions set
forth in the Article of Incorporation that permit the directors to redeem shares
or refuse to transfer shares in any case where such directors, in good faith,
believe that a failure to redeem or that a transfer of shares would result in
the loss of the Company's REIT status;
12. That the Company has been a domestic corporation during its entire
existence;
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13. That the Company has not been, is not, and will not be (i) a bank,
a mutual savings bank, a cooperative bank, a domestic building and loan
association or other savings institution, a small business investment company
operating under the Small Business Investment Act of 1958, or a corporation
created under state law for the purpose of promoting, maintaining, and assisting
the economy within a state by making loans, or (ii) an insurance company;
14. That at no time during the last half of any taxable year for which
a REIT election has been made or during the taxable year ended December 31,
1997, for which a REIT election will be made has more than 50% of the value of
the Company's outstanding stock been beneficially owned by five or fewer
individuals; and that the Company will take all measures within its control to
ensure that, at no time during the last half of any taxable year for which a
REIT election will be made will more than 50% of the value of the Company's
outstanding stock be beneficially owned by or for five or fewer individuals;
15. That the record and beneficial ownership of the Company has been
and will held by 100 or more persons;
16. That at least 95% of the gross income derived by the Company
(including the income derived through its ownership of the Operating Partnership
and the Affiliated Partnerships) in all taxable years consisted of: (i) amounts
derived from rental of real property, including rents attributable to personal
property as described in representation (20) below and including charges for
services customarily furnished or rendered in connection with the rental of such
real property, whether or not such charges are separately stated, but excluding
rents received from parties in which the Company owns 10% or more of the vote or
value of equity ownership of such party and excluding amounts received or
accrued with respect to any real or personal property if the Company furnishes
noncustomary services to the tenants or manages or operates such property other
than through an independent contractor from which neither the Company nor the
Partnership derives any form of income; (ii) interest; (iii) gain realized upon
the sale of all or a portion of a Real Estate Asset that is not a Prohibited
Transaction; (iv) dividends; (v) abatements and refunds of tax; (vi) income and
gain from Foreclosure Property; and (vii) amounts for making loans by secured
properties or to purchase or lease real property; and that I have no reason to
believe that such 95% gross income test will not continue to be met for the
taxable year that will end December 31, 1998;
17. That at least 75% of the gross income derived by the Company
(including the income derived through its ownership of the Operating Partnership
and the Affiliated Partnerships) in all taxable years consisted of: (i) amounts
derived from rental of real property, including rents attributable to personal
property as described in representation (20) below and including charges for
services customarily furnished or rendered in connection with the rental of such
real property, whether or not such charges are separately stated, but excluding
rents received from parties in which the Company owns 10% or more of the vote or
value of equity ownership of such party and excluding amounts received or
accrued with respect to any real or personal property if the Company
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furnishes noncustomary services to the tenants or manages or operates such
property other than through an independent contractor from which neither the
Company nor the Partnership derives any form of income; (ii) interest on
obligations secured by mortgages on real property or on interests in real
property; (iii) gain realized upon the sale of all or a portion of the real
property; (iv) abatements and refunds of property tax; (v) income and gain
derived from Foreclosure Property; (vi) amounts for agreeing to make loans
secured by real property or to purchase or lease real property; and (vii) gain
from the sale or disposition of a Real Estate Asset that is not a Prohibited
Transaction; and that I have no reason to believe that such 75% gross income
test will not continue to be met for the taxable year that will end December 31,
1998;
18. That less than 30% of the gross income of the Company (including
the income derived through its ownership of the Operating Partnership and the
Affiliated Partnerships) in all taxable years was derived from (i) the sale or
other disposition of stock or securities held for less than one year; (ii)
property in a transaction that is a Prohibited Transaction; and (iii) real
property (including interests in real property and interests in mortgages on
real property) held for less than four years other than property compulsorily or
involuntarily converted and property that is Foreclosure Property;
19. That the Company, the Operating Partnership and the Affiliated
Partnerships, have not entered into and will not enter into any lease,
agreement, or other arrangement in connection with the rental of real property
under which any amount payable to the Company, the Operating Partnership, or the
Affiliated Partnerships depends or will depend in whole or in part on the income
or profits derived from any tenant (or sub-tenant) of such real property (except
that such an amount may be based on a fixed percentage or percentages of gross
receipts or sales);
20. That (i) less than 15% of the rent received or accrued from any
lease of real property has been and will be attributable to personal property;
(ii) any such personal property has been and will be leased under or in
connection with a lease of the real property; and (iii) no personal property
owned by the Company or the Operating Partnership at any time has had or will
have significant value in excess of its adjusted basis for federal income tax
purposes;
21. That for purposes of Items 16 and 17 above, "rent" does not include
rent received for any real property directly or indirectly from any person in
which the Company owns (i) in the case of a corporation, 10% or more of the
total combined voting power of all classes of stock entitled to vote, or 10% or
more of the total combined voting power of all classes of stock entitled to
vote, or 10% or more of the total number of shares of all classes of stock; or
(ii) in the case of an entity other than a corporation, an interest of 10% or
more in the assets or net profits of such entity; (for purposes of this
representation, ownership is determined by taking into account the attribution
rules, which generally apply a look-through provision to determine constructive
stock ownership);
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22. That the fair market value of any real property (or, with respect
to any construction loan, the fair market value of the land plus the reasonably
estimated cost of the improvements other than personal property) securing a
note, determined at the time the Company became bound to make the loan, is equal
to or exceeds the amount of the loan;
23. That the Company has reviewed and will continue to review all
leases for each property to ensure that such leases conform with all REIT
requirements;
24. That neither the Company, the Operating Partnership, nor the
Affiliated Partnerships, have provided or will provide any services to any
tenant other than services that would be considered customarily furnished or
rendered in connection with the rental of real property, such as the furnishing
of water, heat, lights, trash collection, and maintenance of common areas;
25. That no Independent Contractor providing management and operating
functions for either the Company, the Operating Partnership, or the Affiliated
Partnerships, or any of their properties has any ownership interest in the
Company in excess of 35%;
26. That at the close of each quarter of any taxable year that the
Company has made or will make a REIT election, at least 75% of the total
combined value of its assets, including its proportionate share of the assets of
the Operating Partnership and the Affiliated Partnerships, has or will consist
of Real Estate Assets, cash and cash items (including receivables), and
government securities;
27. That at the close of each quarter of any taxable year that the
Company has made or will make a REIT election not more than 25% of the value of
the Company's total assets (including those assets owned indirectly through the
Operating Partnership or the Affiliated Partnerships) has been or will be
represented by securities (other than government securities) for purposes of
this calculation limited in respect of any one issuer to an amount not greater
in value than 5% of the value of the total assets of the Company and to not more
than 10% of the outstanding voting securities of such issuer;
28. That the Company's pro rata share of the value of the securities of
Highwoods Services has not exceeded 5% of the total value of the Company's
assets at the end of any calendar quarter; that 1% of the voting stock of
Highwoods Services is owned by Ronald P. Gibson and Edward J. Fritsch; that the
Company has no informal or formal agreement with Highwoods Services or the other
shareholders of Highwoods Services regarding the voting of the Highwoods
Services stock; and that the stock owned by Ronald P. Gibson and Edward J.
Fritsch is not subject to any voting or purchase agreement that effectively
would deny such individuals of the economic rights of such stock;
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29. That at the close of each quarter of any taxable year that the
Company has made or will make a REIT election the Company has not owned and will
not own directly or indirectly securities in any one issuer, including mutual
funds, having an aggregated value in excess of 5% of the value of the total
assets of the Company;
30. That the Company, the Operating Partnership, and the Affiliated
Partnerships have held and hold all real property and all other assets for
investment purposes and not as (i) stock in trade or other property of a kind
which would properly be includible in inventory if on hand at the close of the
taxable year, or (ii) property held primarily for sale to customers in the
ordinary course of the trade or business of the Operating Partnership or the
Company;
31. That for each taxable year for which a REIT election has been or
will be made the Company has distributed or will distribute an amount equal to
or exceeding the sum of 95% of the Company's real estate investment trust
taxable income for such taxable year, determined without regard for the
deduction for dividends paid and by excluding any net capital gain, and 95% of
the excess of the net income from Foreclosure Property over the tax imposed on
such income, reduced by, any excess noncash income;
32. That for each taxable year for which a REIT election has been or
will be made the Company has and will (i) maintain stock records that disclose
actual ownership of the Company's outstanding stock, and (ii) within 30 days of
each taxable year end, demand a written statement from shareholders of record,
including holders of the Company's stock warrants, for the purpose of disclosing
actual ownership as required by Treas.
Reg. Section 1.857-8;
33. That the Company has at all times adopted and will continue to use
a calendar year accounting period;
34. That other than the direct ownership of the stock in
Highwoods/Florida GP Corp., Highwoods Realty GP Corp., Highwoods/Tennessee
Properties, Inc., Jackson Acquisition Corporation, and Florida Transition Co.
II, each of which is a Qualified REIT Subsidiary, and the indirect ownership of
stock in Highwoods Services and its subsidiaries, Southeast Realty Options Corp.
and PSC Acquisition Corporation (which is owned through RC One LLC), the Company
has owned no stock or other voting securities in any corporation at the close of
any quarter of any taxable year ended on or before December 31, 1997, or as of
the date hereof;
35. That Highwoods Properties Company was merged with and into the
Company; that such merger was intended to qualify as a tax-free reorganization
within the meaning of Section 368 of the Code; that I have no reason to believe
such merger did not so qualify and, for purposes hereof, you may assume that it
did so qualify; and that, at the time of such merger, neither Highwoods
Properties Company nor any corporation that it directly or indirectly owned had
any earnings and profits accumulated from a year when it was taxable as a "C"
corporation;
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36. That Eakin & Smith, Inc. was merged with and into the Company; and
that, at the time of such merger, neither Eakin & Smith, Inc. nor any
corporation that it directly or indirectly owned had any earnings and profits
accumulated from a year when it was taxable as a "C" corporation;
37. That Crocker Realty Trust, Inc. was merged with and into the
Company; that, at the time of such merger, Crocker Realty Trust, Inc. qualified
as a REIT; that during the course of the due diligence conducted in connection
with such merger, I had no reason to believe that Crocker Realty Trust, Inc. did
not so qualify; and that neither Crocker Realty Trust, Inc., nor any corporation
that it directly or indirectly owned had any Subchapter C earnings and profits;
38. That Associated Capital Properties, Inc. was merged with and into
the Company; that such merger was intended to qualify as a tax-free
reorganization within the meaning of Section 368 of the Code; that I have no
reason to believe such merger did not so qualify and, for purposes hereof, you
may assume that it did so qualify; and that, at the time of such merger, neither
Associated Capital Properties, Inc., nor any corporation that it directly or
indirectly owned had any earnings and profits accumulated from a year when it
was taxable as a "C" corporation;
39. That the Operating Partnership, AP-GP Southeast Portfolio Partners,
L.P., Highwoods/Tennessee Holdings, L.P., AP Southeast Portfolio Partners, L.P.,
and Highwoods/Florida Holdings, L.P. were formed as partnerships under the laws
of the applicable states; that Shockoe Plaza LLC, which is owned 99% by the
Operating Partnership and 1% by Highwoods Services, was formed as a limited
liability company under the laws of Virginia and elected to be treated as a
partnership for federal income tax purposes; and that such partnerships
(including Shockoe Plaza LLC) have made no election to be treated as a
corporation or any other type of entity for federal income tax purposes;
40. That I have no reason to believe that the Garcia Transaction will
cause the Company to fail to satisfy any of the matters set forth in this
certificate or to fail to qualify as a REIT in the taxable year that will end
December 31, 1998;
41. That the acquisition by the Company of the membership interest in
RC One LLC, which owns 100% of the stock of PSC Acquisition Corporation, from
Riparius Development Corporation ("Riparius") was consummated pursuant to the
terms and conditions of the Master Agreement of Merger and Acquisition by and
among the Company, the Operating Partnership, Highwoods Services, Riparius,
Michael J. McCarthy, and James K. Flannery, Jr., and the Purchase Agreement by
and among the Company and Riparius occurred on January 8, 1998; and that the
membership interest in RC One LLC was transferred to Highwoods Services on
January 22, 1998;
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42. That the Company has filed timely tax returns in each year of its
existence and has not included any information in such returns due to fraud with
an intent to evade taxes;
43. That no proceedings are pending or, to the knowledge of the
undersigned, threatened against the Operating Partnership, the Company, any of
their subsidiaries (including corporations, limited and general partnerships,
joint ventures and other entities, whether directly or indirectly controlled) or
any of their properties, before or by any Federal state or other commission,
board, court, or administrative agency wherein an unfavorable decision, ruling,
or finding would materially and adversely affect the business, property,
financial condition, or income of the Company, the Operating Partnership, and
their subsidiaries considered as one enterprise or any of their properties.
44. That the Company's ownership interests in the Operating Partnership
and its other directly or indirectly held subsidiaries (the "Subsidiaries") are
held free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity, except for security interests granted in respect
to indebtedness of the Company or the Subsidiaries as described in the
Registration Statement.
45. That the description of the Company, its properties, and its method
of operation contained in the Registration Statement is accurate and complete in
all material aspects with respect to this opinion; and
46. That the Company will undertake to advise you of any change in the
representations made herein for so long as the Registration Statement referred
to above remains in effect.
The foregoing Certification is provided to Alston & Bird LLP in
connection with rendering an opinion regarding the qualification of the Company
as a REIT and may not be relied upon for any other purpose or by any other
party. It is understood that such opinion is limited to the factual matters
revealed pursuant hereto and other materials provided to them and that to the
extent required, I have asked questions of the appropriate individuals to
confirm the foregoing answers, and to the best of my knowledge and belief such
answers are true, correct, and complete and in no way are misleading.
/s/ Mack D. Pridgen, III
January 22, 1998 ----------------------------------
MACK D. PRIDGEN, III
Vice-President and General Counsel
Highwoods Properties, Inc.
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