HIGHWOODS PROPERTIES, INC.

Results of Operations

Three Months Ended June 30, 2025 and 2024

Rental and Other Revenues

Rental and other revenues were $4.1 million, or 2.0%, lower in the second quarter of 2025 as compared to 2024 primarily due to lost revenue from property dispositions, lower consolidated same property revenues and lost revenue from properties taken out of service, which decreased rental and other revenues by $4.2 million, $2.0 million and $1.6 million, respectively. Same property rental and other revenues were lower primarily due to a decrease in average occupancy, partially offset by higher average GAAP rents per rentable square foot, lower credit losses and higher termination fee and parking income. These decreases were partially offset by a $4.0 million increase in revenue from the acquisition of Advance Auto Parts Tower in Raleigh. We expect rental and other revenues to be lower for the remainder of 2025 as compared to 2024 for similar reasons.

Operating Expenses

Rental property and other expenses were $0.9 million, or 1.4%, lower in the second quarter of 2025 as compared to 2024 primarily due to property dispositions and lower expenses from properties taken out of service, which decreased operating expenses by $1.7 million and $0.9 million, respectively. These decreases were partially offset by $0.9 million of higher consolidated same property expenses and $0.9 million of expenses from the acquisition of Advance Auto Parts Tower in Raleigh. Same property operating expenses were higher primarily due to higher taxes and contract services. We expect rental property and other expenses to be lower for the remainder of 2025 as compared to 2024 for similar reasons.

Depreciation and amortization expense was $0.9 million, or 1.3%, higher in the second quarter of 2025 as compared to 2024 primarily due to the acquisition of Advance Auto Parts Tower in Raleigh, partially offset by property dispositions. We expect depreciation and amortization to be relatively consistent for the remainder of 2025 as compared to 2024 as depreciation and amortization from the acquisition of Advance Auto Parts Tower in Raleigh is expected to be offset by property dispositions.

General and administrative expenses were $1.0 million, or 10.3%, higher in the second quarter of 2025 as compared to 2024 primarily due to higher predevelopment cost write-offs. We expect general and administrative expenses to be lower for the remainder of 2025 as compared to 2024 due to lower incentive compensation and lower predevelopment cost write-offs.

Interest Expense

Interest expense was $1.8 million, or 4.9%, higher in the second quarter of 2025 as compared to 2024 primarily due to higher average debt balances and lower capitalized interest, partially offset by lower average interest rates. We expect interest expense to be higher for the remainder of 2025 as compared to 2024 primarily for similar reasons.

Other Income

Other income was $2.8 million lower in the second quarter of 2025 as compared to 2024 primarily due to a 2024 refund of $5.8 million in the aggregate of Tennessee franchise taxes paid for the 2020 through 2023 tax years. During the second quarter of 2024, the State of Tennessee modified the methodology for calculating franchise taxes. The modification lowers our annual franchise tax obligation and was allowed to be applied retrospectively back to 2020. This decrease was partially offset by $3.0 million of proceeds received in 2025 from the Florida Department of Transportation for the impact of roadway improvements adjacent to a non-core property in Tampa.

Gains on Disposition of Property

Gains on disposition of property were $35.0 million lower in the second quarter of 2025 as compared to 2024. The second quarter 2024 gains related to building dispositions in Raleigh.

Equity in Earnings of Unconsolidated Affiliates

Equity in earnings of unconsolidated affiliates was $0.8 million lower in the second quarter of 2025 as compared to 2024 primarily due to higher net losses from our 23Springs and Granite Park Six joint ventures, which own newly constructed buildings that were completed in the first quarter of 2025 and the third quarter of 2023, respectively, but have not yet stabilized. These decreases were partially offset by lower interest expense from our McKinney & Olive joint venture due to the payoff of a mortgage loan in the third quarter of 2024.

Earnings Per Common Share - Diluted

Diluted earnings per common share was $0.42 lower in the second quarter of 2025 as compared to 2024 due to a decrease in net income for the reasons discussed above.

Six Months Ended June 30, 2025 and 2024

Rental and Other Revenues

Rental and other revenues were $15.0 million, or 3.6%, lower in the first six months of 2025 as compared to 2024 primarily due to lost revenue from property dispositions, lower consolidated same property revenues and lost revenue from properties taken out of service, which decreased rental and other revenues by $9.0 million, $8.1 million and $2.8 million, respectively. Same property rental and other revenues were lower primarily due to a decrease in average occupancy and lower cost recoveries, partially offset by higher average GAAP rents per rentable square foot and higher termination fee and parking income. These decreases were partially offset by a $4.6 million increase in revenue from the acquisition of Advance Auto Parts Tower in Raleigh.

Operating Expenses

Rental property and other expenses were $6.3 million, or 4.7%, lower in the first six months of 2025 as compared to 2024 primarily due to property dispositions, lower consolidated same property expenses and lower expenses from properties taken out of service, which decreased operating expenses by $3.6 million, $2.1 million and $1.5 million, respectively. Same property operating expenses were lower primarily due to lower property taxes, partially offset by higher utilities, contract services and repairs and maintenance. These decreases were partially offset by a $1.1 million increase in expenses from the acquisition of Advance Auto Parts Tower in Raleigh.

Depreciation and amortization expense was $1.3 million, or 0.9%, lower in the first six months of 2025 as compared to 2024 primarily due to property dispositions, partially offset by the acquisition of Advance Auto Parts Tower in Raleigh.

General and administrative expenses were $0.9 million, or 4.2%, higher in the first six months of 2025 as compared to 2024 primarily due to higher predevelopment cost write-offs.

Interest Expense

Interest expense was $1.9 million, or 2.6%, higher in the first six months of 2025 as compared to 2024 primarily due to higher average debt balances and lower capitalized interest, partially offset by lower average interest rates.

Other Income

Other income was $2.4 million lower in the first six months of 2025 as compared to 2024 primarily due to a 2024 refund of $5.8 million in the aggregate of Tennessee franchise taxes paid for the 2020 through 2023 tax years. During the second quarter of 2024, the State of Tennessee modified the methodology for calculating franchise taxes. The modification lowers our annual franchise tax obligation and was allowed to be applied retrospectively back to 2020. This decrease was partially offset by $3.0 million of proceeds received in 2025 from the Florida Department of Transportation for the impact of roadway improvements adjacent to a non-core property in Tampa and higher interest income from seller financing and loans provided to the 2827 Peachtree and Midtown East joint ventures.

Gains on Disposition of Property

Gains on disposition of property were $40.0 million higher in the first six months of 2025 as compared to 2024. The 2025 gains primarily related to building dispositions in Tampa. The 2024 gains related to building dispositions in Raleigh.

Equity in Earnings of Unconsolidated Affiliates

Equity in earnings of unconsolidated affiliates was $0.1 million lower in the first six months of 2025 as compared to 2024 primarily due to higher net losses from our 23Springs and Granite Park Six joint ventures, which own newly constructed buildings that were completed in the first quarter of 2025 and the third quarter of 2023, respectively, but have not yet stabilized. These decreases were partially offset by lower interest expense from our McKinney & Olive joint venture due to the payoff of a mortgage loan in the third quarter of 2024.

Earnings Per Common Share - Diluted

Diluted earnings per common share was $0.23 higher in the first six months of 2025 as compared to 2024 due to an increase in net income for the reasons discussed above.