Line of Credit and Notes Payable

During the three months ended September 30, 2011, Piedmont exercised its extension option to extend the maturity date of the $500 Million Unsecured Facility by one year to August 30, 2012 and exercised its extension options to extend the maturity dates of the $140.0 Million 500 W. Monroe Mortgage Loan and the $45.0 Million 500 W. Monroe Mezzanine 1-A Loan Participation to August 9, 2012.

On September 20, 2011, Piedmont entered into an agreement to sell its interest in the office property known as the 35 W. Wacker Building in Chicago, Illinois. The property is encumbered by a mortgage note, which will be assumed by the purchaser as part of the transaction. In accordance with GAAP, Piedmont included the note payable in the disposal group of assets and liabilities presented as held for sale on the accompanying consolidated balance sheet as of September 30, 2011. See Note 10 for additional information.

Piedmont made interest payments on all debt facilities, including interest rate swap cash settlements related to Piedmont’s $250 Million Unsecured Term Loan, totaling approximately $16.8 million and $16.7 million for the three months ended September 30, 2011 and 2010, respectively, and $50.1 million and $53.0 million for the nine months ended September 30, 2011 and 2010, respectively.

See Note 8 below for a description of Piedmont’s estimated fair value of debt as of September 30, 2011.

The following table summarizes the terms of Piedmont’s indebtedness outstanding as of September 30, 2011 and December 31, 2010 (in thousands):



Facility	Collateral	Rate⁽¹⁾			Maturity	Amount Outstanding as of
Facility	Collateral	Rate⁽¹⁾			Maturity	September 30, 2011		December 31, 2010
Secured
$45.0 Million Fixed-Rate Loan	4250 N. Fairfax	5.20	%		6/1/2012	$	45,000	$	45,000
$200.0 Million Mortgage Note	Aon Center	4.87	%		5/1/2014	200,000		200,000
$25.0 Million Mortgage Note	Aon Center	5.70	%		5/1/2014	25,000		25,000
$350.0 Million Secured Pooled Facility	Nine Property Collateralized Pool ⁽²⁾	4.84	%		6/7/2014	350,000		350,000
$105.0 Million Fixed-Rate Loan	US Bancorp Center	5.29	%		5/11/2015	105,000		105,000
$125.0 Million Fixed-Rate Loan	Four Property Collateralized Pool ⁽³⁾	5.50	%		4/1/2016	125,000		125,000
$42.5 Million Fixed-Rate Loan	Las Colinas Corporate Center I & II	5.70	%		10/11/2016	42,525		42,525
$140.0 Million WDC Mortgage Notes	1201 & 1225 Eye Street	5.76	%		11/1/2017	140,000		140,000
$140.0 Million 500 W. Monroe Mortgage Loan	500 W. Monroe	LIBOR + 1.008%		⁽⁴⁾	8/9/2012	140,000		—
$45.0 Million 500 W. Monroe Mezzanine I Loan- A Participation	500 W. Monroe	LIBOR + 1.45%		⁽⁴⁾	8/9/2012	45,000		—
Subtotal/Weighted Average ⁽⁵⁾		4.59	%			1,217,525		1,032,525
Unsecured
$250 Million Unsecured Term Loan		LIBOR + 1.50%			6/28/2011	—		250,000
$500 Million Unsecured Facility		0.84	%	⁽⁶⁾	8/30/2012	327,000		—
Subtotal/Weighted Average ⁽⁵⁾		0.84	%			327,000		250,000
Total/ Weighted Average ⁽⁵⁾		3.79	%			$	1,544,525	$	1,282,525


⁽¹⁾	All of Piedmont’s outstanding debt as of September 30, 2011 and December 31, 2010 is interest-only debt.


⁽²⁾	Nine property collateralized pool includes: 1200 Crown Colony Drive, Braker Pointe III, 2 Gatehall Drive, One and Two Independence Square, 2120 West End Avenue, 400 Bridgewater Crossing, 200 Bridgewater Crossing, and Fairway Center II.


⁽³⁾	Four property collateralized pool includes 1430 Enclave Parkway, Windy Point I and II, and 1055 East Colorado Boulevard.


⁽⁴⁾	Subject to interest rate cap agreements, which limit Piedmont’s exposure to potential increases in the LIBOR rate to 2.19%.

⁽⁵⁾

Weighted average is based on contractual balance of outstanding debt and interest rates in the table as of September 30, 2011. As such, the following metrics would change to 4.63% for the weighted average interest rate of secured debt, and 3.89% for the weighted average interest rate of all outstanding debt if the note payable included in the disposal group of assets and liabilities held for sale (related to the 35 W. Wacker Building) was included in the calculations.

⁽⁶⁾

Piedmont may select from multiple interest rate options with each draw, including the prime rate and various-length LIBOR locks. All LIBOR selections are subject to an additional spread (0.475% as of September 30, 2011) over the selected rate based on Piedmont’s current credit rating. The outstanding balance as of September 30, 2011 consisted of several LIBOR draws ranging between 0.23% and 0.24% (subject to the additional spread mentioned above) as well as a draw subject to the prime rate which was 3.25% at that time.