Impairment Loss on Real Estate Assets

12 Months Ended

Dec. 31, 2021

Piedmont recorded the following impairment losses on real estate assets for the years ended December 31, 2021, 2020, and 2019 (in thousands):


	2021		2020		2019





Two Pierce Place(1)	$	41,000	$	—	$	—
The Dupree(2)	—		—		1,953
600 Corporate Drive(3)	—		—		7,000

Total impairment loss on real estate assets	$	41,000	$	—	$	8,953

(1)Management shortened the intended hold period for the property during the quarter ended December 31, 2021, and in doing so determined that the carrying value would not be recovered from the undiscounted future operating cash flows expected from the use of the asset and its eventual disposition. As a result, Piedmont recognized a loss on impairment calculated as the difference between the carrying value of the asset and the estimated fair value less costs to sell. The estimated fair value was determined based on the net contract price subsequently entered into with an unrelated, third-party purchaser. The fair value measurements used in the evaluation of the non-financial assets above are considered to be Level 1 valuations within the fair value hierarchy as defined by GAAP, as there are direct observations and transactions involving the assets by unrelated, third-party purchasers.

(2)The impairment loss recognized was the result of reducing the asset's carrying value to reflect its fair value, estimated based on the net contract price negotiated with a unrelated, third-party purchaser.

(3)Management shortened the intended hold period for the property, and in doing so determined that the carrying value would not be recovered from the undiscounted future operating cash flows expected from the use of the asset and its eventual disposition. As a result, Piedmont recognized a loss on impairment calculated as the difference between the carrying value of the asset and the estimated fair value less costs to sell. The estimated fair value was determined using widely available market quotations for similar properties, as well as discounted cash flow analysis. Key assumptions used in the analysis were a capitalization and discount rate of 14% and estimated selling costs of 0.75%.