Highwoods Properties Closes Sale of Network Operations Center at Highwoods Preserve.

RALEIGH, N.C. -- Highwoods Properties, Inc. (NYSE:HIW) today announced that it has completed the sale of the Network Operations Center building at Highwoods Preserve in Tampa, Florida to The Depository Trust and Clearing Corporation. The Company initially announced this transaction in May 2004. Highwoods will receive net proceeds of approximately $18.0 million for the two-story, 176,000-square foot building, one third of which is shell space. In addition, within the next 12 months The Depository Trust is expected to purchase a 3.3-acre tract of vacant land within the Preserve, originally designated for future expansion, for net proceeds of approximately $1.5 million. As previously disclosed, the Company will record an impairment charge of approximately $3.6 million in the second quarter related to the building sale. The land sale will result in a gain of approximately $800,000 which will be recorded when that sale is completed.

Ed Fritsch, President and COO of Highwoods Properties, stated, "The Depository Trust wanted to accelerate the closing of this transaction and everyone is pleased all the documentation could be completed and processed two months ahead of schedule. The sale of the Network Operations Center is an important milestone for Highwoods Preserve and we are hopeful this will accelerate interest among other corporations looking to relocate or establish operations in this world-class campus located in a business friendly state with a highly educated labor pool. The Depository Trust is a blue chip company that settled transactions valued at $923 trillion in 2003. The company will add prestige to Highwoods Preserve and we look forward to working closely with them to ensure a smooth transition as they assume responsibility for the Network Operations Center."

About the Company

Highwoods Properties, Inc., a member of the S&P MidCap 400 Index, is a fully integrated, self-administered real estate investment trust ("REIT") that provides leasing, management, development, construction and other customer-related services for its properties and for third parties. As of March 31, 2004, the Company owned or had an interest in 529 in-service office, industrial and retail properties encompassing approximately 41.7 million square feet. Highwoods also owns approximately 1,255 acres of development land. Highwoods is based in Raleigh, North Carolina, and its properties and development land are located in Florida, Georgia, Iowa, Kansas, Maryland, Missouri, North Carolina, South Carolina, Tennessee and Virginia. For more information about Highwoods Properties, please visit our Web site at www.highwoods.com.