Highwoods Properties (HIW) 8-KHighwoods Agrees to Acquire Office Assets from

The Company’s total investment, including the estimated value of the non-core assets, is expected to be $769 million, which includes $28 million of near-term building improvements and $5 million of transaction costs. The transaction is expected to include, among other things, the assumption of four secured loans collateralized by the core office buildings estimated to be recorded at fair value of $403 million in the aggregate, with a weighted average effective interest rate of 3.7% and a weighted average maturity of 10.8 years. The value of the non-core assets represents less than 12% of the anticipated total investment.

The acquisition, which is subject to customary closing conditions, is scheduled to close during the third quarter of 2021. The Company is posting $50 million of earnest money deposits that are non-refundable except in limited circumstances.

The core office buildings in Charlotte and Raleigh, which encompass 1,630,000 square feet in total, were 95% leased at December 31, 2020 with rent collections of over 99% during 2020. These properties are projected to generate cash net operating income of $38.0 million and GAAP net operating income of $42.7 million in the first four quarters following closing.

The Company’s plan is to ultimately fund the acquisition primarily by accelerating the sales of existing non-core assets. The Company expects to return its balance sheet metrics to current levels by mid-2022.

The financial impacts of these planned investment activities were not included in the Company’s 2021 per share FFO outlook published on February 9, 2021. While the Company will provide an updated 2021 FFO outlook as part of its first quarter earnings release on April 27, 2021, it does

not intend to update its FFO outlook to reflect the financial impacts of these planned investment activities until the closing of the acquisition.

150 Fayetteville is a 29-story, Class A officer tower encompassing 560,000 square feet in CBD Raleigh. The building was 91% leased at December 31, 2020 with a current weighted average lease term of 5.8 years. With this acquisition, the Company will own nearly 1.5 million square feet of Class A office buildings concentrated within four city blocks in CBD Raleigh, one of the city’s Best Business Districts (BBDs). The Company also owns two development sites in CBD Raleigh that can support more than 500,000 square feet of Class A office.

CAPTRUST Tower is a 16-story, Class A office tower located in the heart of Raleigh’s vibrant mixed-use North Hills submarket, a new BBD for Highwoods. This 300,000 square foot building, which has a wide array of office and amenity retail customers, was 98% leased at December 31, 2020 with a current weighted average lease term of 8.3 years.

Capitol Towers is a 479,000 square foot asset that includes two 10-story office buildings, the award-winning Legion Brewing and additional amenity retail in the vibrant and upscale SouthPark submarket of Charlotte, also a new BBD for Highwoods. Capitol Towers, which was completed between 2015 and 2017, was 98% leased on a combined basis at December 31, 2020 with a current weighted average lease term of 8.9 years.

Morrocroft Centre is a 291,000 square foot, three-building office complex in the SouthPark submarket of Charlotte. Morrocroft Centre was 95% leased on a combined basis at December 31, 2020 with a current weighted average lease term of 6.1 years.

Galleria 75 is a mixed-use redevelopment site in the Cumberland/Galleria submarket of Atlanta, one of the city’s BBDs. The site is located less than one mile from Highwoods-owned Riverwood 100 and 200, which encompass 800,000 square feet and were 95% occupied on a combined basis at December 31, 2020. Galleria 75 can support up to 600,000 square feet of office development and 300 apartment units. The site’s two existing low-rise office buildings totaling 111,000 square feet are 90% leased to customers on short-term leases. Because Galleria 75 will be classified as a development parcel, net operating income generated from the two existing buildings, which is estimated to be approximately $1.2 million annually, will not be included in the Company’s calculation of FFO.

The mezzanine loan is part of the financing structure used by a third party to construct 8West, a 195,000 square foot, 9-story office building on the western side of the Georgia Tech campus in Midtown Atlanta. Armour Yards is a multi-building creative office project located between Atlanta’s Buckhead and Midtown submarkets and along the future Beltline extension. Armour Yards consists of four adaptive reuse office buildings totaling 187,000 square feet that were 93% leased at December 31, 2020 as well as a 36,000 square foot, recently completed office building. As part of the transaction, PAC will separately market Armour Yards for sale to a third party. If PAC chooses not to sell Armour Yards to a third party, Highwoods will close on the acquisition of the creative office project no later than the first quarter of 2022.

The Company plans to fund the initial $250 million cash portion of the purchase price with borrowings under its current $750 million unsecured revolving credit facility and an expected $200 million, six-month unsecured bridge facility from JPMorgan Chase Bank, N.A. Both facilities bear interest at LIBOR plus 90 basis points. The bridge facility, which is subject to definitive documentation and customary conditions, can be extended at the Company’s option for an additional six-month period and will contain financial and other covenants that are similar to the covenants under the Company’s revolving credit facility.

The Company’s long-term plan is to fund the acquisition primarily by accelerating the sale of $500 to $600 million of non-core assets currently owned by the Company. The Company expects to return its balance sheet metrics to current levels by mid-2022. The Company can provide no assurances, however, that it will dispose of any assets on favorable terms, or at all, because the dispositions are subject to the negotiation and execution of sale agreements and would then be subject to the buyers’ completion of satisfactory due diligence and other customary closing conditions. Approximately $250 million, or an amount equal to the cash portion of the purchase price, of the planned dispositions are expected to qualify for tax-deferred treatment under Section 1031 of the Internal Revenue Code.

J.P. Morgan is acting as exclusive financial advisor to Highwoods. Allman Spry Davis Leggett & Crumpler, P.A. is serving as outside real estate counsel to Highwoods.

A presentation highlighting the planned acquisition and planned acceleration of non-core dispositions can be accessed through the link below and in the Investors section of the Company’s website at www.highwoods.com.

Today, Monday, April 19, 2021, at 11:00 A.M. ET, Highwoods will host a conference call to discuss the matters highlighted in this press release. For US/Canada callers, dial (800) 756-3565. A live, listen-only webcast and a subsequent replay can be accessed through the Company’s website at www.highwoods.com under the “Investors” section.

Highwoods Properties, headquartered in Raleigh, North Carolina, is a publicly traded (NYSE:HIW) real estate investment trust (“REIT”) and a member of the S&P MidCap 400 Index. The Company is a fully-integrated office REIT that owns, develops, acquires, leases and manages properties primarily in the BBDs of Atlanta, Charlotte, Nashville, Orlando, Pittsburgh, Raleigh, Richmond and Tampa. For more information about Highwoods Properties, please visit our website at www.highwoods.com.

Certain matters discussed in this press release are forward-looking statements within the meaning of the federal securities laws, such as: the planned acquisition of a portfolio of office assets from PAC on the terms described in this press release; the terms of the bridge facility; the planned sales of non-core assets and expected pricing and impact with respect to such

sales, including the tax impact of such sales; the anticipated total investment, projected leasing activity, estimated replacement cost and expected net operating income of acquired properties and properties to be developed; and expected future leverage of the Company. These statements are distinguished by use of the words “will,” “expect,” “intend,” “plan,” “anticipate” and words of similar meaning. Although Highwoods believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved.