HIW Highwoods Realty Limited Partnership Dashboard

Management Discussion

• Rental and other revenues were $9.0 million, or 4.7%, lower in the first quarter of 2021 as compared to 2020 primarily due to lost revenue from property dispositions and lower same property revenues, which decreased rental and other revenues by $10.3 million and $3.6 million, respectively. Same property rental and other revenues were lower primarily due to a decrease in average occupancy and lower cost recovery and parking income as a result of reduced usage of our assets because of the COVID-19 pandemic, partly offset by higher average GAAP rents per rentable square foot. These decreases were partly offset by the acquisition of our joint venture partner’s 75.0% interest in the Forum, the recognition of deferred leasing commission income that was received in connection with the acquisition and development properties placed in service, which increased rental and other revenues by $3.3 million, $1.5 million and $0.7 million, respectively. We expect rental and other revenues to be higher for the remainder of 2021 as compared to 2020 due to the acquisition of our joint venture partner’s 75.0% interest in the Forum, development properties placed in service and higher same property revenues, partly offset by lost revenue from property dispositions. Rental and other revenues, particularly same property revenues, could be adversely affected, perhaps significantly, in the event customers default on their leases, file bankruptcy and/or otherwise experience significant financial difficulty as a result of the COVID-19 pandemic or if our overall leasing and demand for office space are negatively impacted by potential changes in customer behavior, such as the continued social acceptance, desirability and perceived economic benefits of work-from-home arrangements.