My car runs at 105-108 on the highway so I don't think its the thermostat.

How is your coolant level?
On my 3.0 the same symptoms occurred but would go away when I topped off the coolant. I had a leaking coolant pipe dripping slowly and I knew when it got low because I'd lose heat. That issue has been fixed with a new pipe.

My coolant level is full but i bought a new heater valve to see if that works. If not it's still a new part that the car would eventually need.

I replaced the heater valve with a new OEM unit and it still gets cold when the motor is above 2500rpm both driving and if I rev it at a stop. If I unplug the valve the heater works great. Either I got a bad heater valve out of the box or there's a different issue.

Do you have the automatic hvac control or the Bowden cable heater control system?

I have the automatic climate control.

Since the heater works when it is unplugged it could be that the valve is closed so coolant is not allowed to circulate in the heater core when it is plugged in.

True but I just am not sure why when the valve is plugged in, the heater works fine until the RPM’s go above 2500, then it gets cold.

You will need to get a scanner that has bi directional control and see if the valve is opened or closed when the rpm is above 2500.

thankfully I work at a BMW dealership so that will be no problem.