HIGHWOODS PROPERTIES, INC.

Results of Operations

Three Months Ended September 30, 2025 and 2024

Rental and Other Revenues

Rental and other revenues were $2.6 million, or 1.2%, lower in the third 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 $4.5 million, $2.3 million and $1.7 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 lower credit losses. These decreases were partially offset by an increase of $5.1 million from the acquisitions of Advance Auto Parts Tower in Raleigh and the Legacy Union parking garage in Charlotte and an increase of $0.6 million from recently completed development projects in Raleigh and Charlotte.

Operating Expenses

Rental property and other expenses were $0.2 million, or 0.3%, higher in the third quarter of 2025 as compared to 2024 primarily due to higher consolidated same property expenses and expenses from the acquisitions of Advance Auto Parts Tower in Raleigh and the Legacy Union parking garage in Charlotte, which increased expenses by $1.3 million and $1.2 million, respectively. Same property operating expenses were higher primarily due to higher repairs and maintenance and utilities. These increases were partially offset by decreases from property dispositions and properties taken out of service, which decreased expenses by $1.7 million and $0.3 million, respectively.

We recorded an impairment charge of $8.8 million in the third quarter of 2025 to lower the carrying amount of two non-core, out-of-service assets at Century Center in Atlanta to their estimated fair values. We recorded no such impairment in 2024.

Depreciation and amortization expense was $5.2 million, or 6.6%, lower in the third quarter of 2025 as compared to 2024 primarily due to accelerated depreciation and amortization of tenant improvements and deferred leasing costs in 2024, as well as property dispositions. The accelerated depreciation and amortization in 2024 was associated with the cancellation of a lease with a backfill customer for 110,000 square feet in the former Tivity building in Nashville that was originally scheduled to commence in the third quarter of 2024. These decreases were partially offset by the acquisitions of Advance Auto Parts Tower in Raleigh and the Legacy Union parking garage in Charlotte.

General and administrative expenses were $0.9 million, or 9.1%, lower in the third quarter of 2025 as compared to 2024 primarily due to lower incentive compensation and losses on deferred compensation plan investments (which is fully offset by a corresponding decrease in other income).

Interest Expense

Interest expense was $1.0 million, or 2.7%, higher in the third quarter of 2025 as compared to 2024 primarily due to lower capitalized interest and higher average debt balances, partially offset by lower average interest rates.

Other Income

Other income was $0.1 million lower in the third quarter of 2025 as compared to 2024 primarily due to losses on deferred compensation plan investments (which is fully offset by a corresponding decrease in general and administrative expenses), partially offset by 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 $5.3 million higher in the third quarter of 2025 as compared to 2024. The third quarter 2025 gain related to a building disposition in Richmond. The third quarter 2024 gain related to a land disposition in Greensboro.

Equity in Earnings of Unconsolidated Affiliates

Equity in earnings of unconsolidated affiliates was $0.5 million lower in the third quarter of 2025 as compared to 2024 primarily due to higher net losses from the 23Springs joint venture, which owns a newly constructed building that was completed in the first quarter of 2025 but has not yet stabilized.

Earnings Per Common Share - Diluted

Diluted earnings per common share was $0.02 lower in the third quarter of 2025 as compared to 2024 due to a decrease in net income for the reasons discussed above.

Nine Months Ended September 30, 2025 and 2024

Rental and Other Revenues

Rental and other revenues were $17.6 million, or 2.8%, lower in the nine months ended September 30, 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 $13.5 million, $10.4 million and $4.5 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, higher termination fees and lower credit losses. These decreases were partially offset by an increase of $9.7 million from the acquisitions of Advance Auto Parts Tower in Raleigh and the Legacy Union parking garage in Charlotte and an increase of $1.2 million from recently completed development projects in Raleigh and Charlotte.

Operating Expenses

Rental property and other expenses were $6.1 million, or 3.0%, lower in the nine months ended September 30, 2025 as compared to 2024 primarily due to property dispositions, lower expenses from properties taken out of service and lower consolidated same property expenses, which decreased operating expenses by $5.3 million, $1.8 million and $0.8 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 $2.3 million increase in expenses from the acquisitions of Advance Auto Parts Tower in Raleigh and the Legacy Union parking garage in Charlotte.

We recorded an impairment charge of $8.8 million in the nine months ended September 30, 2025 to lower the carrying amount of two non-core, out-of-service assets at Century Center in Atlanta to their estimated fair values. We recorded no such impairment in 2024.

Depreciation and amortization expense was $6.6 million, or 2.9%, lower in the nine months ended September 30, 2025 as compared to 2024 primarily due to accelerated depreciation and amortization of tenant improvements and deferred leasing costs in 2024, as well as property dispositions. The accelerated depreciation and amortization in 2024 was associated with the cancellation of a lease with a backfill customer for 110,000 square feet in the former Tivity building in Nashville that was originally scheduled to commence in the third quarter of 2024. These decreases were partially offset by the acquisitions of Advance Auto Parts Tower in Raleigh and the Legacy Union parking garage in Charlotte.

General and administrative expenses were consistent in the nine months ended September 30, 2025 as compared to 2024.

Interest Expense

Interest expense was $2.9 million, or 2.6%, higher in the nine months ended September 30, 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 $2.6 million lower in the nine months ended September 30, 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 $45.3 million higher in the nine months ended September 30, 2025 as compared to 2024. The 2025 gains primarily related to building dispositions in Tampa and Richmond. The 2024 gains related to building dispositions in Raleigh and a land disposition in Greensboro.

Equity in Earnings of Unconsolidated Affiliates

Equity in earnings of unconsolidated affiliates was $0.7 million lower in the nine months ended September 30, 2025 as compared to 2024 primarily due to higher net losses from the 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 the 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 $0.21 higher in the nine months ended September 30, 2025 as compared to 2024 due to an increase in net income for the reasons discussed above.