owns/ manages income-producing commercial real estate payout > 90% of income in dividend no...

• Owns/ manages income-producing commercial real estate

• Payout > 90% of Income in Dividend

• No corporate taxes

• > 75% of Assets Real Estate

• >100 Shareholders

REIT 101

Source: NAREIT

REIT 101... TODAY

Source: NAREIT

REIT 101

Source: NAREIT

FinanceAnalysis

Internal/External Reporting

Capital (Debt/Equity) Raising

DevelopmentArchitectureEngineeringConstructionProject Management

InvestmentsAcquisition Sourcing

UnderwritingTransaction Structuring

Dispositions

Asset Mgmt/OperationsLeasing

Property ManagementConstruction

'05 '06 '07 '08 '09 '10 '11 '12 '13

$356M

$241

$144

$57

$89

$125

$20

$158

$286

$1.5B Dispositions

HIW Dispositions 7.0% Cap Rate

Portfolio

'05 '06 '07 '08 '09 '10 '11 '12 '13

$4M $11 $9 $43 $25

$65

$309 $296

$549

$1.3B Acquisitions

HIW Acquisitions 8.0% GAAP Cap Rate

Portfolio

Source: REIS and HIW Public Filings

HIW Development Announcements

'05 '06 '07 '08 '09 '10 '11 '12 '13

$78M

$362

$127

$54

$4 $13

$72

$8

$206

$924M Development

Announcements

9.7% GAAP Yield

Portfolio

Source: REIS and HIW Public Filings

HIW DispositionsHIW Acquisitions

'05 '06 '07 '08 '09 '10 '11 '12 '13 $-

$100

$200

$300

$400

$500

$600

$-

$50

$100

$150

$200

$106B

$144

$212

$59

$17 $47

$66 $81 $84

$4M $11 $9 $43 $25 $65

$309 $296

$549

$356M

$241

$144

$57

$89

$125

$20

$158

$286

US Transactions

Portfolio

Sold when others were buying

Acquired as market improved

Portfolio

Phases are 1-3 years

• Stabilizing fundamentals

• Improving demand • Strong demand • Demand peaks • Recession

• Declining interest rates

• Rental growth • Strong rental growth • Construction continues

• Increasing vacancy

• Capital Scarcity • Improving capital availability

• Accelerating construction

• Rents turn down • Construction stops

• No new construction • Limited new construction

• Plentiful capital availability

• Capital remains available

• Capital unavailable

Phase FourPeak

Phase FiveDownturn

Five Phases of the Real Estate Cycle

Phase OneStabilization

Phase TwoGrowth

Phase ThreeMaturity

Peak Demand

WE ARE HERE

Source: Resource Real Estate Global Property Securities – Feb 2014

Real Estate Trends

Source: REIS and HIW Public Filings

JLL Office Cycle Clock

Peaking Falling

Rising Bottoming

12

3

6

9

Real Estate Trends

JLL Office Cycle Clock Q2 ‘14

Peaking Falling

Rising BottomingOffice

Retail

Industrial

Multi-Family

Landlord Favorable Tenant Favorable

Real Estate Trends

JLL Office Cycle Clock Q2 ‘14

Peaking Falling

Rising Bottoming

Baltimore, Detroit, Hampton Roads, Kansas City, Sacramento

New York, Portland

Cleveland, Minneapolis, Orange County, Phoenix

Charlotte, Chicago, Cincinnati, Fairfield County, Fort Lauderdale, San Antonio, St. Louis, Westchester County

New Jersey

West Palm Beach

Columbus, Long Island, Orlando, Washington, DC

Houston, San Francisco, Silicon Valley

Dallas, San Francisco Peninsula

Miami, Milwaukee, Oakland-East Bay, Philadelphia, Raleigh-Durham, Richmond, San Diego

Austin, Pittsburgh,Seattle-Bellevue

Atlanta, Indianapolis, Jacksonville

Boston, Denver

Real Estate Trends

Source: Wells Fargo Securities Commercial Real Estate Chartbook Q214(Reis, Inc., RCA Analytics, IHS Global Insight, U.S. Dept. of Labor and Wells Fargo Securities, LLC)

Real Estate Trends

1.5%

2.0%

2.5%

3.0%

6.5%

7.0%

7.5%

8.0%

Source: Real Capital Analytics

10 Yr. Treasury Cap Rate

Treasury Rate+69 bps

Cap Rate-37 bps

2012 2013