(State or other jurisdiction of | (IRS Employer | |||||||
incorporation) | Identification No.) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
Exhibit No. | Description | |||||||
99.1 | ||||||||
99.2 | ||||||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
Piedmont Office Realty Trust, Inc. | |||||||||||||||||
(Registrant) | |||||||||||||||||
Dated: | October 30, 2023 | By: | /s/ Robert E. Bowers | ||||||||||||||
Robert E. Bowers | |||||||||||||||||
Chief Financial Officer and Executive Vice President |
Three Months Ended | ||||||||
(in 000s other than per share amounts ) | September 30, 2023 | September 30, 2022 | ||||||
Net income/(loss) applicable to Piedmont | $(17,002) | $3,331 | ||||||
Net income/(loss) per share applicable to common stockholders - diluted | $(0.14) | $0.03 | ||||||
Goodwill impairment charge | $10,957 | — | ||||||
Interest expense | $27,361 | $17,244 | ||||||
Loss on early extinguishment of debt | $820 | — | ||||||
NAREIT Funds From Operations ("FFO") applicable to common stock | $51,896 | $61,352 | ||||||
Core FFO applicable to common stock | $52,716 | $61,352 | ||||||
NAREIT FFO per diluted share | $0.42 | $0.50 | ||||||
Core FFO per diluted share | $0.43 | $0.50 | ||||||
Adjusted FFO applicable to common stock | $39,939 | $43,482 | ||||||
Dividends Paid to Common Stockholders | $15,462 | $25,913 |
Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2023 | |||||||
# of lease transactions | 45 | 140 | ||||||
Total leasing sf | 302,217 | 1,426,808 | ||||||
New tenant leasing sf | 170,276 | 676,278 | ||||||
Cash rent roll up | 11.7 | % | 9.8 | % | ||||
Accrual rent roll up | 10.3 | % | 13.5 | % | ||||
Retention ratio | 76.0 | % | ||||||
Leased Percentage as of period end | 86.7 | % |
(in 000s except for ratios) | September 30, 2023 | December 31, 2022 | |||||||||
Total Real Estate Assets | $3,502,576 | $3,500,624 | |||||||||
Total Assets | $4,073,778 | $4,085,525 | |||||||||
Total Debt | $2,050,319 | $1,983,681 | |||||||||
Weighted Average Cost of Debt | 5.46 | % | 3.89 | % | |||||||
Debt-to-Gross Assets Ratio | 38.4 | % | 37.6 | % | |||||||
Average Net Debt-to-Core EBITDA (ttm) | 6.4 x | 6.0 x |
(in millions, except per share data) | Low | High | |||||||||
Net income/(loss) | $ | (19) | $ | (17) | |||||||
Add: | |||||||||||
Depreciation | 148 | 151 | |||||||||
Amortization | 87 | 89 | |||||||||
Core FFO applicable to common stock | $ | 216 | $ | 223 | |||||||
Core FFO applicable to common stock per diluted share | $1.74 | $1.80 |
Piedmont Office Realty Trust, Inc. | ||||||||||||||
Consolidated Balance Sheets (Unaudited) | ||||||||||||||
(in thousands) | ||||||||||||||
September 30, 2023 | December 31, 2022 | |||||||||||||
Assets: | ||||||||||||||
Real estate assets, at cost: | ||||||||||||||
Land | $ | 567,244 | $ | 567,244 | ||||||||||
Buildings and improvements | 3,782,385 | 3,682,000 | ||||||||||||
Buildings and improvements, accumulated depreciation | (1,013,019) | (915,010) | ||||||||||||
Intangible lease assets | 177,584 | 205,074 | ||||||||||||
Intangible lease assets, accumulated amortization | (86,197) | (90,694) | ||||||||||||
Construction in progress | 74,579 | 52,010 | ||||||||||||
Total real estate assets | 3,502,576 | 3,500,624 | ||||||||||||
Cash and cash equivalents | 5,044 | 16,536 | ||||||||||||
Tenant receivables | 8,806 | 4,762 | ||||||||||||
Straight line rent receivables | 181,843 | 172,019 | ||||||||||||
Restricted cash and escrows | 5,983 | 3,064 | ||||||||||||
Prepaid expenses and other assets | 26,156 | 17,152 | ||||||||||||
Goodwill | 71,980 | 82,937 | ||||||||||||
Interest rate swaps | 5,841 | 4,183 | ||||||||||||
Deferred lease costs | 483,353 | 505,979 | ||||||||||||
Deferred lease costs, accumulated depreciation | (217,804) | (221,731) | ||||||||||||
Total assets | $ | 4,073,778 | $ | 4,085,525 | ||||||||||
Liabilities: | ||||||||||||||
Unsecured debt, net of discount and unamortized debt issuance costs of $18,556 and $13,319, respectively | $ | 1,853,598 | $ | 1,786,681 | ||||||||||
Secured Debt | 196,721 | 197,000 | ||||||||||||
Accounts payable, accrued expenses, and accrued capital expenditures | 120,579 | 110,306 | ||||||||||||
Dividends payable | — | 25,357 | ||||||||||||
Deferred income | 89,990 | 59,977 | ||||||||||||
Intangible lease liabilities, less accumulated amortization | 45,825 | 56,949 | ||||||||||||
Total liabilities | 2,306,713 | 2,236,270 | ||||||||||||
Stockholders' equity: | ||||||||||||||
Common stock (123,696,475 and 123,439,558 shares outstanding as of September 30, 2023 and December 31, 2022, respectively) | 1,237 | 1,234 | ||||||||||||
Additional paid in capital | 3,714,629 | 3,711,005 | ||||||||||||
Cumulative distributions in excess of earnings | (1,943,652) | (1,855,893) | ||||||||||||
Other comprehensive income | (6,718) | (8,679) | ||||||||||||
Piedmont stockholders' equity | 1,765,496 | 1,847,667 | ||||||||||||
Noncontrolling interest | 1,569 | 1,588 | ||||||||||||
Total stockholders' equity | 1,767,065 | 1,849,255 | ||||||||||||
Total liabilities and stockholders' equity | $ | 4,073,778 | $ | 4,085,525 | ||||||||||
Net debt (Unsecured and Secured Debt less Cash and cash equivalents) | 2,045,275 | 1,967,145 | ||||||||||||
Total Principal Amount of Debt Outstanding (Unsecured and Secured Debt plus discounts and unamortized debt issuance costs) | 2,068,875 | 1,997,000 |
Piedmont Office Realty Trust, Inc. | |||||||||||||||||||||||
Consolidated Statements of Operations | |||||||||||||||||||||||
Unaudited (in thousands, except for per share data) | |||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
9/30/2023 | 9/30/2022 | 9/30/2023 | 9/30/2022 | ||||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Rental and tenant reimbursement revenue | $ | 141,534 | $ | 139,572 | $ | 415,866 | $ | 403,635 | |||||||||||||||
Property management fee revenue | 396 | 303 | 1,340 | 1,280 | |||||||||||||||||||
Other property related income | 5,056 | 4,225 | 15,219 | 11,643 | |||||||||||||||||||
Total revenues | 146,986 | 144,100 | 432,425 | 416,558 | |||||||||||||||||||
Expenses: | |||||||||||||||||||||||
Property operating costs | 59,847 | 59,039 | 176,006 | 166,295 | |||||||||||||||||||
Depreciation | 38,150 | 34,941 | 110,422 | 98,828 | |||||||||||||||||||
Amortization | 20,160 | 23,290 | 63,524 | 67,022 | |||||||||||||||||||
Goodwill impairment charge | 10,957 | — | 10,957 | — | |||||||||||||||||||
General and administrative | 7,043 | 6,590 | 22,013 | 21,212 | |||||||||||||||||||
Total operating expenses | 136,157 | 123,860 | 382,922 | 353,357 | |||||||||||||||||||
Other income (expense): | |||||||||||||||||||||||
Interest expense | (27,361) | (17,244) | (72,827) | (44,917) | |||||||||||||||||||
Other income | 351 | 335 | 3,794 | 2,302 | |||||||||||||||||||
Loss on early extinguishment of debt | (820) | — | (820) | — | |||||||||||||||||||
Gain on sale of real estate assets | — | — | — | 50,674 | |||||||||||||||||||
Total other income (expense) | (27,830) | (16,909) | (69,853) | 8,059 | |||||||||||||||||||
Net income/(loss) | (17,001) | 3,331 | (20,350) | 71,260 | |||||||||||||||||||
Net income/(loss) applicable to noncontrolling interest | (1) | — | (7) | 1 | |||||||||||||||||||
Net income/(loss) applicable to Piedmont | $ | (17,002) | $ | 3,331 | $ | (20,357) | $ | 71,261 | |||||||||||||||
Weighted average common shares outstanding - diluted | 123,696 | 123,697 | 123,640 | 123,631 | |||||||||||||||||||
Net income/(loss) per share applicable to common stockholders - diluted | $ | (0.14) | $ | 0.03 | $ | (0.16) | $ | 0.58 | |||||||||||||||
Piedmont Office Realty Trust, Inc. | ||||||||||||||||||||||||||
Funds From Operations, Core Funds From Operations and Adjusted Funds From Operations | ||||||||||||||||||||||||||
Unaudited (in thousands, except for per share data) | ||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
9/30/2023 | 9/30/2022 | 9/30/2023 | 9/30/2022 | |||||||||||||||||||||||
GAAP net income/(loss) applicable to common stock | $ | (17,002) | $ | 3,331 | $ | (20,357) | $ | 71,261 | ||||||||||||||||||
Depreciation of real estate assets(1) | 37,790 | 34,743 | 109,680 | 98,262 | ||||||||||||||||||||||
Amortization of lease-related costs | 20,151 | 23,278 | 63,495 | 66,986 | ||||||||||||||||||||||
Goodwill impairment charge | 10,957 | — | 10,957 | — | ||||||||||||||||||||||
Gain on sale of real estate assets | — | — | — | (50,674) | ||||||||||||||||||||||
NAREIT Funds From Operations applicable to common stock* | 51,896 | 61,352 | 163,775 | 185,835 | ||||||||||||||||||||||
Loss on early extinguishment of debt | 820 | — | 820 | — | ||||||||||||||||||||||
Core Funds From Operations applicable to common stock* | 52,716 | 61,352 | 164,595 | 185,835 | ||||||||||||||||||||||
Amortization of debt issuance costs and discounts on debt | 1,410 | 922 | 3,961 | 2,463 | ||||||||||||||||||||||
Depreciation of non real estate assets | 350 | 189 | 711 | 537 | ||||||||||||||||||||||
Straight-line effects of lease revenue | (418) | (3,268) | (6,360) | (8,874) | ||||||||||||||||||||||
Stock-based compensation adjustments | 2,070 | 1,950 | 4,348 | 3,116 | ||||||||||||||||||||||
Amortization of lease-related intangibles | (4,479) | (3,542) | (11,010) | (9,713) | ||||||||||||||||||||||
Non-incremental capital expenditures(2) | (11,710) | (14,121) | (35,070) | (42,406) | ||||||||||||||||||||||
Adjusted Funds From Operations applicable to common stock* | $ | 39,939 | $ | 43,482 | $ | 121,175 | $ | 130,958 | ||||||||||||||||||
Weighted average common shares outstanding - diluted | 123,781 | (3) | 123,697 | 123,689 | (3) | 123,631 | ||||||||||||||||||||
NAREIT Funds From Operations per share (diluted) | $ | 0.42 | $ | 0.50 | $ | 1.32 | $ | 1.50 | ||||||||||||||||||
Core Funds From Operations per share (diluted) | $ | 0.43 | $ | 0.50 | $ | 1.33 | $ | 1.50 |
Piedmont Office Realty Trust, Inc. | |||||||||||||||||||||||
EBITDAre, Core EBITDA, Property Net Operating Income (Cash and Accrual), Same Store Net Operating Income (Cash and Accrual) | |||||||||||||||||||||||
Unaudited (in thousands) | |||||||||||||||||||||||
Cash Basis | Accrual Basis | ||||||||||||||||||||||
Three Months Ended | Three Months Ended | ||||||||||||||||||||||
9/30/2023 | 9/30/2022 | 9/30/2023 | 9/30/2022 | ||||||||||||||||||||
Net income/(loss) applicable to Piedmont (GAAP) | $ | (17,002) | $ | 3,331 | $ | (17,002) | $ | 3,331 | |||||||||||||||
Net income/(loss) applicable to noncontrolling interest | 1 | — | 1 | — | |||||||||||||||||||
Interest expense | 27,361 | 17,244 | 27,361 | 17,244 | |||||||||||||||||||
Depreciation | 38,140 | 34,931 | 38,140 | 34,931 | |||||||||||||||||||
Amortization | 20,151 | 23,278 | 20,151 | 23,278 | |||||||||||||||||||
Depreciation and amortization attributable to noncontrolling interests | 20 | 21 | 20 | 21 | |||||||||||||||||||
Goodwill impairment charge | 10,957 | — | 10,957 | — | |||||||||||||||||||
EBITDAre* | 79,628 | 78,805 | 79,628 | 78,805 | |||||||||||||||||||
Loss on early extinguishment of debt | 820 | — | 820 | — | |||||||||||||||||||
Core EBITDA* | 80,448 | 78,805 | 80,448 | 78,805 | |||||||||||||||||||
General and administrative expenses | 7,043 | 6,590 | 7,043 | 6,590 | |||||||||||||||||||
Management fee revenue | (210) | (177) | (210) | (177) | |||||||||||||||||||
Other income | (207) | (119) | (207) | (119) | |||||||||||||||||||
Reversal of non-cash general reserve for uncollectible accounts | (600) | (1,000) | |||||||||||||||||||||
Straight line effects of lease revenue | (418) | (3,268) | |||||||||||||||||||||
Straight line effects of lease revenue attributable to noncontrolling interests | (2) | (4) | |||||||||||||||||||||
Amortization of lease-related intangibles | (4,479) | (3,542) | |||||||||||||||||||||
Property NOI* | 81,575 | 77,285 | 87,074 | 85,099 | |||||||||||||||||||
Net operating (income)/loss from: | |||||||||||||||||||||||
Acquisitions | (5,941) | (2,867) | (7,404) | (4,164) | |||||||||||||||||||
Dispositions | 28 | (2,587) | 28 | (2,579) | |||||||||||||||||||
Other investments(1) | 212 | 211 | 111 | 150 | |||||||||||||||||||
Same Store NOI* | $ | 75,874 | $ | 72,042 | $ | 79,809 | $ | 78,506 | |||||||||||||||
Change period over period in Same Store NOI | 5.3% | N/A | 1.7 | % | N/A |
Piedmont Office Realty Trust, Inc. | |||||||||||||||||||||||
EBITDAre, Core EBITDA, Property Net Operating Income (Cash and Accrual), Same Store Net Operating Income (Cash and Accrual) | |||||||||||||||||||||||
Unaudited (in thousands) | |||||||||||||||||||||||
Cash Basis | Accrual Basis | ||||||||||||||||||||||
Nine Months Ended | Nine Months Ended | ||||||||||||||||||||||
9/30/2023 | 9/30/2022 | 9/30/2023 | 9/30/2022 | ||||||||||||||||||||
Net income/(loss) applicable to Piedmont (GAAP) | $ | (20,357) | $ | 71,261 | $ | (20,357) | $ | 71,261 | |||||||||||||||
Net income/(loss) applicable to noncontrolling interest | 7 | (1) | 7 | (1) | |||||||||||||||||||
Interest expense | 72,827 | 44,917 | 72,827 | 44,917 | |||||||||||||||||||
Depreciation | 110,391 | 98,799 | 110,391 | 98,799 | |||||||||||||||||||
Amortization | 63,495 | 66,986 | 63,495 | 66,986 | |||||||||||||||||||
Depreciation and amortization attributable to noncontrolling interests | 60 | 65 | 60 | 65 | |||||||||||||||||||
Goodwill impairment charge | 10,957 | — | 10,957 | — | |||||||||||||||||||
Gain on sale of real estate assets | — | (50,674) | — | (50,674) | |||||||||||||||||||
EBITDAre* | 237,380 | 231,353 | 237,380 | 231,353 | |||||||||||||||||||
Loss on Early Extinguishment of Debt | 820 | — | 820 | — | |||||||||||||||||||
Core EBITDA* | 238,200 | 231,353 | 238,200 | 231,353 | |||||||||||||||||||
General and administrative expenses | 22,013 | 21,212 | 22,013 | 21,212 | |||||||||||||||||||
Management fee revenue | (756) | (743) | (756) | (743) | |||||||||||||||||||
Other income | (3,218) | (1,655) | (3,218) | (1,655) | |||||||||||||||||||
Reversal of non-cash general reserve for uncollectible accounts | (1,000) | (2,000) | |||||||||||||||||||||
Straight line effects of lease revenue | (6,360) | (8,874) | |||||||||||||||||||||
Straight line effects of lease revenue attributable to noncontrolling interests | (7) | (6) | |||||||||||||||||||||
Amortization of lease-related intangibles | (11,010) | (9,713) | |||||||||||||||||||||
Property NOI* | 237,862 | 229,574 | 256,239 | 250,167 | |||||||||||||||||||
Net operating income/(loss) from: | |||||||||||||||||||||||
Acquisitions | (16,784) | (2,867) | (22,384) | (4,164) | |||||||||||||||||||
Dispositions | 102 | (8,372) | 102 | (8,437) | |||||||||||||||||||
Other investments(1) | 548 | 539 | 244 | 528 | |||||||||||||||||||
Same Store NOI* | $ | 221,728 | $ | 218,874 | $ | 234,201 | $ | 238,094 | |||||||||||||||
Change period over period in Same Store NOI | 1.3 | % | N/A | (1.6) | % | N/A |
EXHIBIT 99.2 |
Page | Page | |||||||||||||
Introduction | Other Investments | |||||||||||||
Corporate Data | Other Investments Detail | |||||||||||||
Investor Information | Supporting Information | |||||||||||||
Earnings Release | Definitions | |||||||||||||
Key Performance Indicators | Research Coverage | |||||||||||||
Financials | Non-GAAP Reconciliations | |||||||||||||
Balance Sheets | In-Service Portfolio Detail | |||||||||||||
Income Statements | Major Leases Not Yet Commenced and Major Abatements | |||||||||||||
Funds From Operations / Adjusted Funds From Operations | Risks, Uncertainties and Limitations | |||||||||||||
Same Store Analysis | ||||||||||||||
Capitalization Analysis | ||||||||||||||
Debt Summary | ||||||||||||||
Debt Detail | ||||||||||||||
Debt Covenant & Ratio Analysis | ||||||||||||||
Operational & Portfolio Information - Office Property Investments | ||||||||||||||
Tenant Diversification | ||||||||||||||
Tenant Credit Rating & Lease Distribution Information | ||||||||||||||
Leased Percentage Information | ||||||||||||||
Rental Rate Roll Up / Roll Down Analysis | ||||||||||||||
Lease Expiration Schedule | ||||||||||||||
Quarterly Lease Expirations | ||||||||||||||
Annual Lease Expirations | ||||||||||||||
Contractual Tenant Improvements & Leasing Commissions | ||||||||||||||
Geographic Diversification | ||||||||||||||
Geographic Diversification by Location Type | ||||||||||||||
Industry Diversification | ||||||||||||||
Property Investment Activity |
Notice to Readers: | ||
Please refer to page 40 for a discussion of important risks related to the business of Piedmont Office Realty Trust, Inc., as well as an investment in its securities, including risks that could cause actual results and events to differ materially from results and events referred to in the forward-looking information. Considering these risks, uncertainties, assumptions, and limitations, the forward-looking statements about leasing, financial operations, leasing prospects, acquisitions, dispositions, etc. contained in this quarterly supplemental information report may differ from actual results. | ||
Certain prior period amounts have been reclassified to conform to the current period financial statement presentation. In addition, many of the schedules herein contain rounding to the nearest thousands or millions and, therefore, the schedules may not total due to this rounding convention. | ||
To supplement the presentation of the Company’s financial results prepared in accordance with U.S. generally accepted accounting principles (GAAP), this report contains certain financial measures that are not prepared in accordance with GAAP, including FFO, Core FFO, AFFO, Same Store NOI, Property NOI, EBITDAre and Core EBITDA. Definitions and reconciliations of these non-GAAP measures to their most comparable GAAP metrics are included beginning on page 33. Each of the non-GAAP measures included in this report has limitations as an analytical tool and should not be considered in isolation or as a substitute for an analysis of the Company’s results calculated in accordance with GAAP. In addition, because not all companies use identical calculations, the Company’s presentation of non-GAAP measures in this report may not be comparable to similarly titled measures disclosed by other companies, including other REITs. The Company may also change the calculation of any of the non-GAAP measures included in this report from time to time in light of its then existing operations. | ||
As of | As of | ||||||||||
September 30, 2023 | December 31, 2022 | ||||||||||
Number of consolidated in-service office properties (1) | 51 | 51 | |||||||||
Rentable square footage (in thousands) (1) | 16,635 | 16,658 | |||||||||
Percent leased (2) | 86.7 | % | 86.7 | % | |||||||
Capitalization (in thousands): | |||||||||||
Total debt - GAAP | $2,050,319 | $1,983,681 | |||||||||
Total principal amount of debt outstanding (excludes premiums, discounts, and deferred financing costs) | $2,068,875 | $1,997,000 | |||||||||
Equity market capitalization (3) | $695,174 | $1,131,941 | |||||||||
Total market capitalization (3) | $2,764,049 | $3,128,941 | |||||||||
Average net principal amount of debt to Core EBITDA - quarterly (4) | 6.4 x | 6.4 x | |||||||||
Average net principal amount of debt to Core EBITDA - trailing twelve months (5) | 6.4 x | 6.0 x | |||||||||
Total principal amount of debt / Total gross assets (6) | 38.4 | % | 37.6 | % | |||||||
Common stock data: | |||||||||||
High closing price during quarter | $7.98 | $10.92 | |||||||||
Low closing price during quarter | $5.47 | $8.80 | |||||||||
Closing price of common stock at period end | $5.62 | $9.17 | |||||||||
Weighted average fully diluted shares outstanding during quarter (in thousands) | 123,781 | 123,633 | |||||||||
Shares of common stock issued and outstanding at period end (in thousands) | 123,696 | 123,440 | |||||||||
Annualized current dividend per share (7) | $0.50 | $0.84 | |||||||||
Ratings (Standard & Poor's / Moody's) | BBB / Baa2 | BBB / Baa2 | |||||||||
Employees | 152 | 149 | |||||||||
(1) | As of September 30, 2023, our consolidated office portfolio consisted of 51 properties (exclusive of one 127,000 square foot property that was out of service for redevelopment, 222 South Orange Avenue in Orlando, FL). | ||||
(2) | Calculated as square footage associated with commenced leases plus square footage associated with executed but uncommenced leases for vacant spaces at our in-service properties, divided by total rentable in-service square footage, all as of the relevant date, expressed as a percentage. Please refer to page 22 for additional analyses regarding Piedmont's leased percentage. | ||||
(3) | Reflects common stock closing price, shares outstanding and principal amount of debt outstanding as of the end of the reporting period, as appropriate. | ||||
(4) | For the purposes of this calculation, we annualize the Core EBITDA for the quarter and use the average daily principal balance of debt outstanding during the quarter, less cash and cash equivalents and escrow deposits and restricted cash as of the end of each month of the quarter. | ||||
(5) | For the purposes of this calculation, we use the sum of Core EBITDA for the trailing four quarters and the average daily principal balance of debt outstanding for the trailing four quarters, less the average of cash and cash equivalents and escrow deposits and restricted cash as of the end of each month in the trailing four quarter period. | ||||
(6) | Total gross assets is defined as total assets with the add-back of accumulated depreciation and accumulated amortization related to real estate assets and accumulated amortization related to deferred lease costs. | ||||
(7) | Annualized amount based on the regular dividends per share recorded for the most recent quarter. |
Corporate | ||
5565 Glenridge Connector, Suite 450 | ||
Atlanta, Georgia 30342 | ||
770.418.8800 | ||
www.piedmontreit.com | ||
Executive Management | |||||||||||
C. Brent Smith | Robert E. Bowers | George Wells | |||||||||
Chief Executive Officer, President | Chief Financial and Administrative Officer | Chief Operating Officer and | |||||||||
and Director | and Executive Vice President | Executive Vice President | |||||||||
Kevin D. Fossum | Christopher A. Kollme | Damian J. Miller | |||||||||
Executive Vice President, | Executive Vice President, | Executive Vice President, | |||||||||
Property Management | Investments | Dallas | |||||||||
Laura P. Moon | Alex Valente | Robert K. Wiberg | |||||||||
Chief Accounting Officer and Treasurer | Executive Vice President, | Executive Vice President, | |||||||||
and Senior Vice President | Southeast Region | Northeast Region and Co-Head of | |||||||||
Development | |||||||||||
Board of Directors | |||||||||||
Frank C. McDowell | Dale H. Taysom | Kelly H. Barrett | Glenn G. Cohen | ||||||||
Director, Chair of the Board of Directors, and | Director, Vice Chair of the | Director, Chair of the Audit Committee, | Director, Chair of the Compensation | ||||||||
Member of the Compensation and Governance | Board of Directors, and Member of the | and Member of the Governance Committee | Committee, and Member of the Audit | ||||||||
Committees | Audit and Capital Committees | and Capital Committees | |||||||||
Venkatesh S. Durvasula | Mary Hager | Barbara B. Lang | C. Brent Smith | ||||||||
Director and Member of the Capital Committee | Director and Member of the | Director, Chair of the Governance Committee | Chief Executive Officer, President | ||||||||
Governance Committee | (including ESG), and Member of the | and Director | |||||||||
Jeffrey L. Swope | Compensation Committee | ||||||||||
Director, Chair of the Capital | |||||||||||
Committee, and Member of the | |||||||||||
Compensation Committee | |||||||||||
Transfer Agent | Corporate Counsel | Institutional Analyst Contact | Investor Relations | ||||||||
Computershare | King & Spalding | Phone: 770.418.8592 | Phone: 866.354.3485 | ||||||||
P.O. Box 43006 | 1180 Peachtree Street, NE | research.analysts@piedmontreit.com | investor.services@piedmontreit.com | ||||||||
Providence, RI 02940-3078 | Atlanta, GA 30309 | www.piedmontreit.com | |||||||||
Phone: 866.354.3485 | Phone: 404.572.4600 |
Three Months Ended | ||||||||
(in 000s other than per share amounts) | September 30, 2023 | September 30, 2022 | ||||||
Net income/(loss) applicable to Piedmont | $(17,002) | $3,331 | ||||||
Net income/(loss) per share applicable to common stockholders - diluted | $(0.14) | $0.03 | ||||||
Goodwill impairment charge | $10,957 | — | ||||||
Interest expense | $27,361 | $17,244 | ||||||
Loss on early extinguishment of debt | $820 | — | ||||||
NAREIT Funds From Operations ("FFO") applicable to common stock | $51,896 | $61,352 | ||||||
Core FFO applicable to common stock | $52,716 | $61,352 | ||||||
NAREIT FFO per diluted share | $0.42 | $0.50 | ||||||
Core FFO per diluted share | $0.43 | $0.50 | ||||||
Adjusted FFO applicable to common stock | $39,939 | $43,482 | ||||||
Dividends Paid to Common Stockholders | $15,462 | $25,913 |
Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2023 | |||||||
# of lease transactions | 45 | 140 | ||||||
Total leasing sf | 302,217 | 1,426,808 | ||||||
New tenant leasing sf | 170,276 | 676,278 | ||||||
Cash rent roll up | 11.7% | 9.8% | ||||||
Accrual rent roll up | 10.3% | 13.5% | ||||||
Retention ratio | 76.0% | |||||||
Leased percentage as of period end | 86.7% |
(in 000s except for ratios) | September 30, 2023 | December 31, 2022 | |||||||||
Total Real Estate Assets | $3,502,576 | $3,500,624 | |||||||||
Total Assets | $4,073,778 | $4,085,525 | |||||||||
Total Debt | $2,050,319 | $1,983,681 | |||||||||
Weighted Average Cost of Debt | 5.46 | % | 3.89% | ||||||||
Debt-to-Gross Assets Ratio | 38.4 | % | 37.6% | ||||||||
Average Net Debt-to-Core EBITDA (ttm) | 6.4 x | 6.0 x |
(in millions, except per share data) | Low | High | |||||||||
Net income/(loss) | $ | (19) | $ | (17) | |||||||
Add: | |||||||||||
Depreciation | 148 | 151 | |||||||||
Amortization | 87 | 89 | |||||||||
Core FFO applicable to common stock | $ | 216 | $ | 223 | |||||||
Core FFO applicable to common stock per diluted share | $1.74 | $1.80 | |||||||||
This section of our supplemental report includes non-GAAP financial measures, including, but not limited to, Earnings Before Interest, Taxes, Depreciation, and Amortization for real estate (EBITDAre), Core Earnings Before Interest, Taxes, Depreciation, and Amortization (Core EBITDA), Funds from Operations (FFO), Core Funds from Operations (Core FFO), Adjusted Funds from Operations (AFFO), and Same Store Net Operating Income (Same Store NOI). Definitions of these non-GAAP measures are provided on page 33 and reconciliations are provided beginning on page 35. |
Three Months Ended | |||||||||||||||||||||||||||||||||||
Selected Operating Data | 9/30/2023 | 6/30/2023 | 3/31/2023 | 12/31/2022 | 9/30/2022 | ||||||||||||||||||||||||||||||
Percent leased | 86.7 | % | 86.2 | % | 86.1 | % | 86.7 | % | 86.8 | % | |||||||||||||||||||||||||
Percent leased - economic (1) | 80.8 | % | 80.0 | % | 79.6 | % | 81.1 | % | 80.6 | % | |||||||||||||||||||||||||
Total revenues | $146,986 | $143,072 | $142,367 | $147,208 | $144,100 | ||||||||||||||||||||||||||||||
Net income / (loss) applicable to Piedmont | -$17,002 | -$1,988 | -$1,367 | $75,569 | $3,331 | ||||||||||||||||||||||||||||||
Net income / (loss) per share applicable to common stockholders - diluted | -$0.14 | -$0.02 | -$0.01 | $0.61 | $0.03 | ||||||||||||||||||||||||||||||
Core EBITDA | $80,448 | $79,212 | $78,541 | $82,186 | $78,805 | ||||||||||||||||||||||||||||||
Core FFO applicable to common stock | $52,716 | $55,535 | $56,344 | $61,235 | $61,352 | ||||||||||||||||||||||||||||||
Core FFO per share - diluted | $0.43 | $0.45 | $0.46 | $0.50 | $0.50 | ||||||||||||||||||||||||||||||
AFFO applicable to common stock | $39,939 | $44,444 | $36,792 | $47,082 | $43,482 | ||||||||||||||||||||||||||||||
Gross regular dividends (2) | $15,462 | $25,975 | $25,965 | $25,918 | $25,913 | ||||||||||||||||||||||||||||||
Regular dividends per share (2) | $0.125 | $0.210 | $0.210 | $0.210 | $0.210 | ||||||||||||||||||||||||||||||
Same store net operating income - accrual basis (3) | 1.7 | % | -3.7 | % | -2.8 | % | -0.7 | % | 0.3 | % | |||||||||||||||||||||||||
Same store net operating income - cash basis (3) | 5.3 | % | 0.2 | % | -1.5 | % | 1.6 | % | -0.3 | % | |||||||||||||||||||||||||
Rental rate roll up / roll down - accrual rents | 10.3 | % | 19.6 | % | 9.9 | % | 11.5 | % | 37.6 | % | |||||||||||||||||||||||||
Rental rate roll up / roll down - cash rents | 11.7 | % | 14.3 | % | 5.7 | % | 6.5 | % | 33.1 | % | |||||||||||||||||||||||||
Selected Balance Sheet Data | |||||||||||||||||||||||||||||||||||
Total real estate assets, net | $3,502,576 | $3,512,128 | $3,486,797 | $3,500,624 | $3,572,591 | ||||||||||||||||||||||||||||||
Total assets | $4,073,778 | $4,094,349 | $4,237,460 | $4,085,525 | $4,185,493 | ||||||||||||||||||||||||||||||
Total liabilities | $2,306,713 | $2,297,015 | $2,417,363 | $2,236,270 | $2,388,162 | ||||||||||||||||||||||||||||||
Ratios & Information for Debt Holders | |||||||||||||||||||||||||||||||||||
Core EBITDA to total revenues | 54.7 | % | 55.4 | % | 55.2 | % | 55.8 | % | 54.7 | % | |||||||||||||||||||||||||
Fixed charge coverage ratio (4) | 2.7 x | 3.2 x | 3.4 x | 3.8 x | 4.3 x | ||||||||||||||||||||||||||||||
Average net principal amount of debt to Core EBITDA - quarterly (5) | 6.4 x | 6.4 x | 6.3 x | 6.4 x | 6.1 x | ||||||||||||||||||||||||||||||
Total gross real estate assets | $4,601,792 | $4,576,943 | $4,518,003 | $4,506,328 | $4,587,669 | ||||||||||||||||||||||||||||||
Total debt - GAAP | $2,050,319 | $2,049,236 | $2,197,955 | $1,983,681 | $2,145,408 | ||||||||||||||||||||||||||||||
Net principal amount of debt (6) | $2,057,848 | $2,051,778 | $2,037,224 | $1,977,400 | $2,146,156 |
(1) | Economic leased percentage excludes the square footage associated with executed but not commenced leases for currently vacant spaces and the square footage associated with tenants receiving rental abatements (after proportional adjustments for tenants receiving only partial rental abatements). Due to variations in rental abatement structures, there will be variability to the economic leased percentage over time as abatements commence and expire. | ||||
(2) | Dividends are reflected in the quarter in which the record date occurred. | ||||
(3) | Please refer to the three pages starting with page 13 for reconciliations to net income and additional same store net operating income information. The statistic provided for each of the prior quarters is based on the same store property population applicable at the time that the metric was initially reported. | ||||
(4) | The fixed charge coverage ratio is calculated as Core EBITDA divided by the sum of interest expense, principal amortization, capitalized interest and preferred dividends (none during periods presented). The Company had principal amortization of $0.3 million for the quarter ended September 30, 2023 and no principal amortization for prior periods presented. The Company had capitalized interest of $1.9 million for the quarter ended September 30, 2023, $1.4 million for the quarter ended June 30, 2023, $1.2 million for the quarter ended March 31, 2023, $1.0 million for the quarter ended December 31, 2022, and $1.1 million for the quarter ended September 30, 2022. | ||||
(5) | For the purposes of this calculation, we annualize the Core EBITDA for the quarter and use the average daily principal balance of debt outstanding during the quarter, less cash and cash equivalents and escrow deposits and restricted cash as of the end of each month of the quarter. | ||||
(6) | Net principal amount of debt is calculated and defined as the total principal amount of debt outstanding minus cash and cash equivalents and escrow deposits and restricted cash all as of the end of the period. |
9/30/2023 | 6/30/2023 | 3/31/2023 | 12/31/2022 | 9/30/2022 | |||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||
Real estate, at cost: | |||||||||||||||||||||||||||||
Land assets | $ | 567,244 | $ | 567,244 | $ | 567,244 | $ | 567,244 | $ | 578,722 | |||||||||||||||||||
Buildings and improvements | 3,782,385 | 3,768,456 | 3,714,572 | 3,682,000 | 3,751,722 | ||||||||||||||||||||||||
Buildings and improvements, accumulated depreciation | (1,013,019) | (981,052) | (947,209) | (915,010) | (926,357) | ||||||||||||||||||||||||
Intangible lease asset | 177,584 | 182,127 | 190,180 | 205,074 | 212,248 | ||||||||||||||||||||||||
Intangible lease asset, accumulated amortization | (86,197) | (83,763) | (83,997) | (90,694) | (88,721) | ||||||||||||||||||||||||
Construction in progress | 74,579 | 59,116 | 46,007 | 52,010 | 44,977 | ||||||||||||||||||||||||
Total real estate assets | 3,502,576 | 3,512,128 | 3,486,797 | 3,500,624 | 3,572,591 | ||||||||||||||||||||||||
Cash and cash equivalents | 5,044 | 5,167 | 170,593 | 16,536 | 10,653 | ||||||||||||||||||||||||
Tenant receivables, net of allowance for doubtful accounts | 8,806 | 5,387 | 6,280 | 4,762 | 7,796 | ||||||||||||||||||||||||
Straight line rent receivable | 181,843 | 180,339 | 176,320 | 172,019 | 173,122 | ||||||||||||||||||||||||
Escrow deposits and restricted cash | 5,983 | 5,055 | 4,183 | 3,064 | 2,191 | ||||||||||||||||||||||||
Prepaid expenses and other assets | 26,156 | 23,566 | 26,810 | 17,152 | 23,925 | ||||||||||||||||||||||||
Goodwill | 71,980 | 82,937 | 82,937 | 82,937 | 98,918 | ||||||||||||||||||||||||
Interest rate swap | 5,841 | 5,693 | 2,899 | 4,183 | 3,760 | ||||||||||||||||||||||||
Deferred lease costs, gross | 483,353 | 482,149 | 486,694 | 505,979 | 510,936 | ||||||||||||||||||||||||
Deferred lease costs, accumulated amortization | (217,804) | (208,072) | (206,053) | (221,731) | (218,399) | ||||||||||||||||||||||||
Total assets | $ | 4,073,778 | $ | 4,094,349 | $ | 4,237,460 | $ | 4,085,525 | $ | 4,185,493 | |||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||
Unsecured debt, net of discount | $ | 1,853,598 | $ | 1,852,236 | $ | 2,000,955 | $ | 1,786,681 | $ | 1,948,408 | |||||||||||||||||||
Secured debt | 196,721 | 197,000 | 197,000 | 197,000 | 197,000 | ||||||||||||||||||||||||
Accounts payable, accrued expenses, and accrued capital expenditures | 120,579 | 107,629 | 98,464 | 135,663 | 111,262 | ||||||||||||||||||||||||
Deferred income | 89,990 | 89,815 | 67,056 | 59,977 | 70,798 | ||||||||||||||||||||||||
Intangible lease liabilities, less accumulated amortization | 45,825 | 50,335 | 53,494 | 56,949 | 60,694 | ||||||||||||||||||||||||
Interest rate swaps | — | — | 394 | — | — | ||||||||||||||||||||||||
Total liabilities | 2,306,713 | 2,297,015 | 2,417,363 | 2,236,270 | 2,388,162 | ||||||||||||||||||||||||
Stockholders' equity: | |||||||||||||||||||||||||||||
Common stock | 1,237 | 1,237 | 1,236 | 1,234 | 1,234 | ||||||||||||||||||||||||
Additional paid in capital | 3,714,629 | 3,712,688 | 3,710,767 | 3,711,005 | 3,709,234 | ||||||||||||||||||||||||
Cumulative distributions in excess of earnings | (1,943,652) | (1,911,188) | (1,883,225) | (1,855,893) | (1,905,544) | ||||||||||||||||||||||||
Other comprehensive loss | (6,718) | (6,977) | (10,266) | (8,679) | (9,194) | ||||||||||||||||||||||||
Piedmont stockholders' equity | 1,765,496 | 1,795,760 | 1,818,512 | 1,847,667 | 1,795,730 | ||||||||||||||||||||||||
Non-controlling interest | 1,569 | 1,574 | 1,585 | 1,588 | 1,601 | ||||||||||||||||||||||||
Total stockholders' equity | 1,767,065 | 1,797,334 | 1,820,097 | 1,849,255 | 1,797,331 | ||||||||||||||||||||||||
Total liabilities, redeemable common stock and stockholders' equity | $ | 4,073,778 | $ | 4,094,349 | $ | 4,237,460 | $ | 4,085,525 | $ | 4,185,493 | |||||||||||||||||||
Common stock outstanding at end of period | 123,696 | 123,692 | 123,643 | 123,440 | 123,395 |
Three Months Ended | ||||||||||||||||||||||||||||||||
9/30/2023 | 6/30/2023 | 3/31/2023 | 12/31/2022 | 9/30/2022 | ||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||
Rental income (1) | $ | 115,250 | $ | 112,238 | $ | 112,560 | $ | 117,148 | $ | 114,280 | ||||||||||||||||||||||
Tenant reimbursements (1) | 26,284 | 25,265 | 24,269 | 24,958 | 25,292 | |||||||||||||||||||||||||||
Property management fee revenue | 396 | 437 | 507 | 395 | 303 | |||||||||||||||||||||||||||
Other property related income | 5,056 | 5,132 | 5,031 | 4,707 | 4,225 | |||||||||||||||||||||||||||
146,986 | 143,072 | 142,367 | 147,208 | 144,100 | ||||||||||||||||||||||||||||
Expenses: | ||||||||||||||||||||||||||||||||
Property operating costs | 59,847 | 58,368 | 57,791 | 59,763 | 59,039 | |||||||||||||||||||||||||||
Depreciation | 38,150 | 36,475 | 35,797 | 34,788 | 34,941 | |||||||||||||||||||||||||||
Amortization | 20,160 | 21,333 | 22,031 | 23,915 | 23,290 | |||||||||||||||||||||||||||
Impairment charge (2) | 10,957 | — | — | 25,981 | — | |||||||||||||||||||||||||||
General and administrative | 7,043 | 7,279 | 7,691 | 7,915 | 6,590 | |||||||||||||||||||||||||||
136,157 | 123,455 | 123,310 | 152,362 | 123,860 | ||||||||||||||||||||||||||||
Other income / (expense): | ||||||||||||||||||||||||||||||||
Interest expense | (27,361) | (23,389) | (22,077) | (20,739) | (17,244) | |||||||||||||||||||||||||||
Other income / (expense) | 351 | 1,787 | 1,656 | 408 | 335 | |||||||||||||||||||||||||||
Gain / (loss) on early extinguishment of debt (3) | (820) | — | — | — | — | |||||||||||||||||||||||||||
Gain / (loss) on sale of real estate (2) | — | — | — | 101,055 | — | |||||||||||||||||||||||||||
Net income / (loss) | (17,001) | (1,985) | (1,364) | 75,570 | 3,331 | |||||||||||||||||||||||||||
Less: Net (income) / loss applicable to noncontrolling interest | (1) | (3) | (3) | (1) | — | |||||||||||||||||||||||||||
Net income / (loss) applicable to Piedmont | $ | (17,002) | $ | (1,988) | $ | (1,367) | $ | 75,569 | $ | 3,331 | ||||||||||||||||||||||
Weighted average common shares outstanding - diluted | 123,696 | 123,671 | 123,550 | 123,633 | 123,697 | |||||||||||||||||||||||||||
Net income / (loss) per share applicable to common stockholders - diluted | $ | (0.14) | $ | (0.02) | $ | (0.01) | $ | 0.61 | $ | 0.03 | ||||||||||||||||||||||
Common stock outstanding at end of period | 123,696 | 123,692 | 123,643 | 123,440 | 123,395 |
(1) | The presentation method used for this line is not in conformance with GAAP. To be in conformance with the current GAAP standard, the Company would combine amounts presented on the rental income line with amounts presented on the tenant reimbursements line and present that aggregated figure on one line entitled "rental and tenant reimbursement revenue." | ||||
(2) | The impairment charge reflected in the third quarter of 2023 was related to the write down of the Company's goodwill balance allocated to its Minneapolis market. The impairment charge reflected in the fourth quarter of 2022 was related to (a) the write down of the Company's goodwill balance of $16.0 million allocated to the Washington, D.C. market; and (b) the write down of the book value of one property. The gain on sale of real estate reflected in the fourth quarter of 2022 was primarily related to the sales of One Brattle Square and 1414 Massachusetts Avenue, both in Cambridge, MA. | ||||
(3) | The loss on early extinguishment of debt in the third quarter of 2023 was related to the pro-rata write-off of unamortized debt issuance costs and discounts associated with the repurchase of approximately $350 million of the $400 Million Unsecured Senior Notes due 2024, as well as fees paid, pursuant to a tender offer during the quarter. |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||
9/30/2023 | 9/30/2022 | Change ($) | Change (%) | 9/30/2023 | 9/30/2022 | Change ($) | Change (%) | ||||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||||||||
Rental income (1) | $ | 115,250 | $ | 114,280 | $ | 970 | 0.8 | % | $ | 340,048 | $ | 334,256 | $ | 5,792 | 1.7 | % | |||||||||||||||||||
Tenant reimbursements (1) | 26,284 | 25,292 | 992 | 3.9 | % | 75,818 | 69,379 | 6,439 | 9.3 | % | |||||||||||||||||||||||||
Property management fee revenue | 396 | 303 | 93 | 30.7 | % | 1,340 | 1,280 | 60 | 4.7 | % | |||||||||||||||||||||||||
Other property related income | 5,056 | 4,225 | 831 | 19.7 | % | 15,219 | 11,643 | 3,576 | 30.7 | % | |||||||||||||||||||||||||
146,986 | 144,100 | 2,886 | 2.0 | % | 432,425 | 416,558 | 15,867 | 3.8 | % | ||||||||||||||||||||||||||
Expenses: | |||||||||||||||||||||||||||||||||||
Property operating costs | 59,847 | 59,039 | (808) | (1.4) | % | 176,006 | 166,295 | (9,711) | (5.8) | % | |||||||||||||||||||||||||
Depreciation | 38,150 | 34,941 | (3,209) | (9.2) | % | 110,422 | 98,828 | (11,594) | (11.7) | % | |||||||||||||||||||||||||
Amortization | 20,160 | 23,290 | 3,130 | 13.4 | % | 63,524 | 67,022 | 3,498 | 5.2 | % | |||||||||||||||||||||||||
Goodwill impairment charge (2) | 10,957 | — | (10,957) | (100.0) | % | 10,957 | — | (10,957) | (100.0) | % | |||||||||||||||||||||||||
General and administrative | 7,043 | 6,590 | (453) | (6.9) | % | 22,013 | 21,212 | (801) | (3.8) | % | |||||||||||||||||||||||||
136,157 | 123,860 | (12,297) | (9.9) | % | 382,922 | 353,357 | (29,565) | (8.4) | % | ||||||||||||||||||||||||||
Other income / (expense): | |||||||||||||||||||||||||||||||||||
Interest expense | (27,361) | (17,244) | (10,117) | (58.7) | % | (72,827) | (44,917) | (27,910) | (62.1) | % | |||||||||||||||||||||||||
Other income / (expense) | 351 | 335 | 16 | 4.8 | % | 3,794 | 2,302 | 1,492 | 64.8 | % | |||||||||||||||||||||||||
Gain / (loss) on early extinguishment of debt (3) | (820) | — | (820) | (100.0) | % | (820) | — | (820) | (100.0) | % | |||||||||||||||||||||||||
Gain / (loss) on sale of real estate (2) | — | — | — | — | % | — | 50,674 | (50,674) | (100.0) | % | |||||||||||||||||||||||||
Net income / (loss) | (17,001) | 3,331 | (20,332) | (610.4) | % | (20,350) | 71,260 | (91,610) | (128.6) | % | |||||||||||||||||||||||||
Less: Net (income) / loss applicable to noncontrolling interest | (1) | — | (1) | (100.0) | % | (7) | 1 | (8) | (800.0) | % | |||||||||||||||||||||||||
Net income / (loss) applicable to Piedmont | $ | (17,002) | $ | 3,331 | $ | (20,333) | (610.4) | % | $ | (20,357) | $ | 71,261 | $ | (91,618) | (128.6) | % | |||||||||||||||||||
Weighted average common shares outstanding - diluted | 123,696 | 123,697 | 123,640 | 123,631 | |||||||||||||||||||||||||||||||
Net income / (loss) per share applicable to common stockholders - diluted | $ | (0.14) | $ | 0.03 | $ | (0.16) | $ | 0.58 | |||||||||||||||||||||||||||
Common stock outstanding at end of period | 123,696 | 123,395 | 123,696 | 123,395 |
(1) | The presentation method used for this line is not in conformance with GAAP. To be in conformance with the current GAAP standard, the Company would combine amounts presented on the rental income line with amounts presented on the tenant reimbursements line and present that aggregated figure on one line entitled "rental and tenant reimbursement revenue." | ||||
(2) | The impairment charge for the three months ended September 30, 2023 was related to the write down of the Company's goodwill balance allocated to its Minneapolis market. The gain on sale of real estate for the nine months ended September 30, 2022 was primarily related to the sales of 225 and 235 Presidential Way in Woburn, MA. | ||||
(3) | The loss on early extinguishment of debt in the third quarter of 2023 was related to the pro-rata write-off of unamortized debt issuance costs and discounts associated with the repurchase of approximately $350 million of the $400 Million Unsecured Senior Notes due 2024, as well as fees paid, pursuant to a tender offer during the quarter. | ||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
9/30/2023 | 9/30/2022 | 9/30/2023 | 9/30/2022 | |||||||||||||||||||||||
GAAP net income / (loss) applicable to common stock | $ | (17,002) | $ | 3,331 | $ | (20,357) | $ | 71,261 | ||||||||||||||||||
Depreciation for real estate assets (1) | 37,790 | 34,743 | 109,680 | 98,262 | ||||||||||||||||||||||
Amortization (1) | 20,151 | 23,278 | 63,495 | 66,986 | ||||||||||||||||||||||
Goodwill impairment charge | 10,957 | — | 10,957 | — | ||||||||||||||||||||||
Loss / (gain) on sale of properties | — | — | — | (50,674) | ||||||||||||||||||||||
NAREIT funds from operations applicable to common stock | 51,896 | 61,352 | 163,775 | 185,835 | ||||||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||||
Loss / (gain) on early extinguishment of debt | 820 | — | 820 | — | ||||||||||||||||||||||
Core funds from operations applicable to common stock | 52,716 | 61,352 | 164,595 | 185,835 | ||||||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||||
Amortization of debt issuance costs and discounts on debt | 1,410 | 922 | 3,961 | 2,463 | ||||||||||||||||||||||
Depreciation of non real estate assets | 350 | 189 | 711 | 537 | ||||||||||||||||||||||
Straight-line effects of lease revenue (1) | (418) | (3,268) | (6,360) | (8,874) | ||||||||||||||||||||||
Stock-based compensation adjustments | 2,070 | 1,950 | 4,348 | 3,116 | ||||||||||||||||||||||
Amortization of lease-related intangibles (1) | (4,479) | (3,542) | (11,010) | (9,713) | ||||||||||||||||||||||
Non-incremental capital expenditures (2) | ||||||||||||||||||||||||||
Building/Construction/Development | (7,085) | (6,897) | (14,751) | (15,151) | ||||||||||||||||||||||
Tenant Improvements | (2,687) | (3,146) | (10,614) | (18,054) | ||||||||||||||||||||||
Leasing Costs | (1,938) | (4,078) | (9,705) | (9,201) | ||||||||||||||||||||||
Adjusted funds from operations applicable to common stock | $ | 39,939 | $ | 43,482 | $ | 121,175 | $ | 130,958 | ||||||||||||||||||
Weighted average common shares outstanding - diluted | 123,781 | 123,697 | 123,689 | 123,631 | ||||||||||||||||||||||
Funds from operations per share (diluted) | $ | 0.42 | $ | 0.50 | $ | 1.32 | $ | 1.50 | ||||||||||||||||||
Core funds from operations per share (diluted) | $ | 0.43 | $ | 0.50 | $ | 1.33 | $ | 1.50 | ||||||||||||||||||
Common stock outstanding at end of period | 123,696 | 123,395 | 123,696 | 123,395 |
(1) | Includes our proportionate share of amounts attributable to consolidated properties. | ||||
(2) | Non-incremental capital expenditures are defined on page 33. |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
9/30/2023 | 9/30/2022 | 9/30/2023 | 9/30/2022 | ||||||||||||||||||||
Net income / (loss) applicable to Piedmont | $ | (17,002) | $ | 3,331 | $ | (20,357) | $ | 71,261 | |||||||||||||||
Net income / (loss) applicable to noncontrolling interest | 1 | — | 7 | (1) | |||||||||||||||||||
Interest expense | 27,361 | 17,244 | 72,827 | 44,917 | |||||||||||||||||||
Depreciation (1) | 38,140 | 34,931 | 110,391 | 98,799 | |||||||||||||||||||
Amortization (1) | 20,151 | 23,278 | 63,495 | 66,986 | |||||||||||||||||||
Depreciation and amortization attributable to noncontrolling interests | 20 | 21 | 60 | 65 | |||||||||||||||||||
Goodwill impairment charge | 10,957 | — | 10,957 | — | |||||||||||||||||||
(Gain) / loss on sale of properties | — | — | — | (50,674) | |||||||||||||||||||
EBITDAre | 79,628 | 78,805 | 237,380 | 231,353 | |||||||||||||||||||
(Gain) / loss on early extinguishment of debt | 820 | — | 820 | — | |||||||||||||||||||
Core EBITDA (2) | 80,448 | 78,805 | 238,200 | 231,353 | |||||||||||||||||||
General & administrative expenses | 7,043 | 6,590 | 22,013 | 21,212 | |||||||||||||||||||
Non-cash general reserve for uncollectible accounts | (600) | (1,000) | (1,000) | (2,000) | |||||||||||||||||||
Management fee revenue (3) | (210) | (177) | (756) | (743) | |||||||||||||||||||
Other (income) / expense (1) (4) | (207) | (119) | (3,218) | (1,655) | |||||||||||||||||||
Straight-line effects of lease revenue (1) | (418) | (3,268) | (6,360) | (8,874) | |||||||||||||||||||
Straight-line effects of lease revenue attributable to noncontrolling interests | (2) | (4) | (7) | (6) | |||||||||||||||||||
Amortization of lease-related intangibles (1) | (4,479) | (3,542) | (11,010) | (9,713) | |||||||||||||||||||
Property net operating income (cash basis) | 81,575 | 77,285 | 237,862 | 229,574 | |||||||||||||||||||
Deduct net operating (income) / loss from: | |||||||||||||||||||||||
Acquisitions (5) | (5,941) | (2,867) | (16,784) | (2,867) | |||||||||||||||||||
Dispositions (6) | 28 | (2,587) | 102 | (8,372) | |||||||||||||||||||
Other investments (7) | 212 | 211 | 548 | 539 | |||||||||||||||||||
Same store net operating income (cash basis) | $ | 75,874 | $ | 72,042 | $ | 221,728 | $ | 218,874 | |||||||||||||||
Change period over period | 5.3 | % | N/A | 1.3 | % | N/A |
(1) | Includes our proportionate share of amounts attributable to consolidated properties. | ||||
(2) | The Company has historically recognized approximately $2 to $3 million of termination income on an annual basis. Given the size of its asset base and the number of tenants with which it conducts business, Piedmont considers termination income of that magnitude to be a normal part of its operations and a recurring part of its revenue stream; however, the recognition of termination income is typically variable between quarters and throughout any given year and is dependent upon when during the year the Company receives termination notices from tenants. During the three months ended September 30 2023, Piedmont recognized $0.3 million of termination income, as compared with $0.4 million during the same period in 2022. During the nine months ended September 30, 2023, Piedmont recognized $0.7 million of termination income, as compared with $1.1 million during the same period in 2022. | ||||
(3) | Presented net of related operating expenses incurred to earn the revenue; therefore, the information presented on this line will not tie to the data presented on the income statements. | ||||
(4) | Figures presented on this line may not tie back to the relevant sources as some activity is attributable to property operations and is, therefore, presented in property net operating income. | ||||
(5) | Acquisitions includes 1180 Peachtree Street in Atlanta, GA, purchased in the third quarter of 2022. | ||||
(6) | Dispositions include Two Pierce Place in Itasca, IL and 225 and 235 Presidential Way in Woburn, MA, sold in the first quarter of 2022, and One Brattle Square and 1414 Massachusetts Avenue in Cambridge, MA, sold in the fourth quarter of 2022. | ||||
(7) | Other investments include active out-of-service redevelopment and development projects, land, and recently completed redevelopment and development projects. Additional information on our land holdings can be found on page 32.The operating results from 222 South Orange Avenue in Orlando, FL, are included in this line item. | ||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
9/30/2023 | 9/30/2022 | 9/30/2023 | 9/30/2022 | ||||||||||||||||||||
Net income / (loss) applicable to Piedmont | $ | (17,002) | $ | 3,331 | $ | (20,357) | $ | 71,261 | |||||||||||||||
Net income / (loss) applicable to noncontrolling interest | 1 | — | 7 | (1) | |||||||||||||||||||
Interest expense | 27,361 | 17,244 | 72,827 | 44,917 | |||||||||||||||||||
Depreciation (1) | 38,140 | 34,931 | 110,391 | 98,799 | |||||||||||||||||||
Amortization (1) | 20,151 | 23,278 | 63,495 | 66,986 | |||||||||||||||||||
Depreciation and amortization attributable to noncontrolling interests | 20 | 21 | 60 | 65 | |||||||||||||||||||
Goodwill impairment charge | 10,957 | — | 10,957 | — | |||||||||||||||||||
(Gain) / loss on sale of properties | — | — | — | (50,674) | |||||||||||||||||||
EBITDAre | 79,628 | 78,805 | 237,380 | 231,353 | |||||||||||||||||||
(Gain) / loss on early extinguishment of debt | 820 | — | 820 | — | |||||||||||||||||||
Core EBITDA (2) | 80,448 | 78,805 | 238,200 | 231,353 | |||||||||||||||||||
General & administrative expenses | 7,043 | 6,590 | 22,013 | 21,212 | |||||||||||||||||||
Management fee revenue (3) | (210) | (177) | (756) | (743) | |||||||||||||||||||
Other (income) / expense (1) (4) | (207) | (119) | (3,218) | (1,655) | |||||||||||||||||||
Property net operating income (accrual basis) | 87,074 | 85,099 | 256,239 | 250,167 | |||||||||||||||||||
Deduct net operating (income) / loss from: | |||||||||||||||||||||||
Acquisitions (5) | (7,404) | (4,164) | (22,384) | (4,164) | |||||||||||||||||||
Dispositions (6) | 28 | (2,579) | 102 | (8,437) | |||||||||||||||||||
Other investments (7) | 111 | 150 | 244 | 528 | |||||||||||||||||||
Same store net operating income (accrual basis) | $ | 79,809 | $ | 78,506 | $ | 234,201 | $ | 238,094 | |||||||||||||||
Change period over period | 1.7 | % | N/A | (1.6) | % | N/A |
(1) | Includes our proportionate share of amounts attributable to consolidated properties. | ||||
(2) | The Company has historically recognized approximately $2 to $3 million of termination income on an annual basis. Given the size of its asset base and the number of tenants with which it conducts business, Piedmont considers termination income of that magnitude to be a normal part of its operations and a recurring part of its revenue stream; however, the recognition of termination income is typically variable between quarters and throughout any given year and is dependent upon when during the year the Company receives termination notices from tenants. During the three months ended September 30 2023, Piedmont recognized $0.3 million of termination income, as compared with $0.4 million during the same period in 2022. During the nine months ended September 30, 2023, Piedmont recognized $0.7 million of termination income, as compared with $1.1 million during the same period in 2022. | ||||
(3) | Presented net of related operating expenses incurred to earn the revenue; therefore, the information presented on this line will not tie to the data presented on the income statements. | ||||
(4) | Figures presented on this line may not tie back to the relevant sources as some activity is attributable to property operations and is, therefore, presented in property net operating income. | ||||
(5) | Acquisitions includes 1180 Peachtree Street in Atlanta, GA, purchased in the third quarter of 2022. | ||||
(6) | Dispositions include Two Pierce Place in Itasca, IL and 225 and 235 Presidential Way in Woburn, MA, sold in the first quarter of 2022, and One Brattle Square and 1414 Massachusetts Avenue in Cambridge, MA, sold in the fourth quarter of 2022. | ||||
(7) | Other investments include active out-of-service redevelopment and development projects, land, and recently completed redevelopment and development projects. Additional information on our land holdings can be found on page 32. The operating results from 222 South Orange Avenue in Orlando, FL, are included in this line item. |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
9/30/2023 | 9/30/2022 | Change ($) | Change (%) | 9/30/2023 | 9/30/2022 | Change ($) | Change (%) | |||||||||||||||||||||||||
Revenue | ||||||||||||||||||||||||||||||||
Cash rental income (1) | $ | 104,041 | $ | 101,322 | $ | 2,719 | 2.7 | % | $ | 304,602 | $ | 302,782 | $ | 1,820 | 0.6 | % | ||||||||||||||||
Tenant reimbursements (2) | 24,751 | 24,060 | 691 | 2.9 | % | 71,530 | 66,877 | 4,653 | 7.0 | % | ||||||||||||||||||||||
Straight line effects of lease revenue | (83) | 2,624 | (2,707) | (103.2) | % | 3,718 | 8,098 | (4,380) | (54.1) | % | ||||||||||||||||||||||
Amortization of lease-related intangibles | 3,418 | 2,840 | 578 | 20.4 | % | 7,755 | 9,122 | (1,367) | (15.0) | % | ||||||||||||||||||||||
Total rents | 132,127 | 130,846 | 1,281 | 1.0 | % | 387,605 | 386,879 | 726 | 0.2 | % | ||||||||||||||||||||||
Other property related income (3) | 4,389 | 3,872 | 517 | 13.4 | % | 13,486 | 11,476 | 2,010 | 17.5 | % | ||||||||||||||||||||||
Total revenue | 136,516 | 134,718 | 1,798 | 1.3 | % | 401,091 | 398,355 | 2,736 | 0.7 | % | ||||||||||||||||||||||
Property operating expense (4) | 56,851 | 56,428 | (423) | (0.7) | % | 167,465 | 160,908 | (6,557) | (4.1) | % | ||||||||||||||||||||||
Property other income / (expense) | 144 | 216 | (72) | (33.3) | % | 575 | 647 | (72) | (11.1) | % | ||||||||||||||||||||||
Same store net operating income (accrual) | $ | 79,809 | $ | 78,506 | $ | 1,303 | 1.7 | % | $ | 234,201 | $ | 238,094 | $ | (3,893) | (1.6) | % | ||||||||||||||||
Less: | ||||||||||||||||||||||||||||||||
Straight line effects of lease revenue | 83 | (2,624) | 2,707 | 103.2 | % | (3,718) | (8,098) | 4,380 | 54.1 | % | ||||||||||||||||||||||
Amortization of lease-related intangibles | (3,418) | (2,840) | (578) | (20.4) | % | (7,755) | (9,122) | 1,367 | 15.0 | % | ||||||||||||||||||||||
Non-cash general reserve for uncollectible accounts | (600) | (1,000) | 400 | 40.0 | % | (1,000) | (2,000) | 1,000 | 50.0 | % | ||||||||||||||||||||||
Same store net operating income (cash) | $ | 75,874 | $ | 72,042 | $ | 3,832 | 5.3 | % | $ | 221,728 | $ | 218,874 | $ | 2,854 | 1.3 | % | ||||||||||||||||
(1) | The increase in cash rental income for the three months and the nine months ended September 30, 2023 as compared to the same periods in 2022 was primarily due to rental rate roll ups associated with recent new and renewal leasing activity, along with contractual rent increases across the portfolio. | ||||
(2) | The increase in tenant reimbursements for the nine months ended September 30, 2023 as compared to the same period in 2022 was primarily the result of an increase in recoverable operating expenses in 2023 in comparison to 2022 due to the increased physical utilization of our buildings. | ||||
(3) | The increase in other property related income for the three months and the nine months ended September 30, 2023 as compared to the same periods in 2022 was primarily related to increased parking demand across the portfolio as a result of post-pandemic increased business activity. | ||||
(4) | The increase in property operating expense for the nine months ended September 30, 2023 as compared to the same period in 2022 was primarily associated with increased variable operating costs as a result of increasing physical office space utilization by tenants across our portfolio. |
As of | As of | ||||||||||
September 30, 2023 | December 31, 2022 | ||||||||||
Market Capitalization | |||||||||||
Common stock price | $5.62 | $9.17 | |||||||||
Total shares outstanding | 123,696 | 123,440 | |||||||||
Equity market capitalization (1) | $695,174 | $1,131,941 | |||||||||
Total debt - GAAP | $2,050,319 | $1,983,681 | |||||||||
Total principal amount of debt outstanding (excludes premiums, discounts, and deferred financing costs) | $2,068,875 | $1,997,000 | |||||||||
Total market capitalization (1) | $2,764,049 | $3,128,941 | |||||||||
Total principal amount of debt / Total market capitalization (1) | 74.8 | % | 63.8 | % | |||||||
Ratios & Information for Debt Holders | |||||||||||
Total gross assets (2) | $5,390,798 | $5,312,960 | |||||||||
Total principal amount of debt / Total gross assets (2) | 38.4 | % | 37.6 | % | |||||||
Average net principal amount of debt to Core EBITDA - quarterly (3) | 6.4 x | 6.4 x | |||||||||
Average net principal amount of debt to Core EBITDA - trailing twelve months (4) | 6.4 x | 6.0 x |
(1) | Reflects common stock closing price, shares outstanding, and principal amount of debt outstanding as of the end of the reporting period, as appropriate. | ||||
(2) | Total gross assets is defined as total assets with the add-back of accumulated depreciation and accumulated amortization related to real estate assets and accumulated amortization related to deferred lease costs. | ||||
(3) | For the purposes of this calculation, we annualize the Core EBITDA for the quarter and use the average daily principal balance of debt outstanding during the quarter, less cash and cash equivalents and escrow deposits and restricted cash as of the end of each month of the quarter. | ||||
(4) | For the purposes of this calculation, we use the sum of Core EBITDA for the trailing four quarters and the average daily principal balance of debt outstanding for the trailing four quarters, less the average of cash and cash equivalents and escrow deposits and restricted cash as of the end of each month in the trailing four quarter period. |
Floating Rate & Fixed Rate Debt | ||||||||||||||
Debt (1) | Principal Amount Outstanding | Weighted Average Stated Interest Rate (2) | Weighted Average Maturity | |||||||||||
Floating Rate | $572,000 | (3) | 6.39% | 25.6 months | ||||||||||
Fixed Rate | 1,496,875 | 5.10% | 63.5 months | |||||||||||
Total | $2,068,875 | 5.46% | 53.0 months | |||||||||||
Unsecured & Secured Debt | ||||||||||||||
Debt (1) | Principal Amount Outstanding | Weighted Average Stated Interest Rate (2) | Weighted Average Maturity | |||||||||||
Unsecured | $1,872,154 | 5.60% | 52.3 months | |||||||||||
Secured | 196,721 | 4.10% | 60.1 months | |||||||||||
Total | $2,068,875 | 5.46% | 53.0 months | |||||||||||
Debt Maturities (4) | |||||||||||||||||||||||
Maturity Year | Secured Debt - Principal Amount Outstanding (1) | Unsecured Debt - Principal Amount Outstanding (1) | Weighted Average Stated Interest Rate (2) | Percentage of Total | |||||||||||||||||||
2023 | $— | $— | N/A | —% | |||||||||||||||||||
2024 | — | 50,154 | 4.45% | 2.4% | |||||||||||||||||||
2025 | — | 665,000 | 5.73% | 32.1% | |||||||||||||||||||
2026 | — | — | N/A | —% | |||||||||||||||||||
2027 | — | 157,000 | 6.24% | 7.6% | |||||||||||||||||||
2028 | 196,721 | 400,000 | 7.55% | 28.9% | |||||||||||||||||||
2029 | — | — | N/A | —% | |||||||||||||||||||
2030 | — | 300,000 | 3.15% | 14.5% | |||||||||||||||||||
2031 | — | — | N/A | —% | |||||||||||||||||||
2032 | — | 300,000 | 2.75% | 14.5% | |||||||||||||||||||
Total | $196,721 | $1,872,154 | 5.46% | 100.0% | |||||||||||||||||||
(1) | All of Piedmont's outstanding debt as of September 30, 2023, was interest-only debt with the exception of the $197 million mortgage associated with 1180 Peachtree Street in Atlanta, GA. | ||||
(2) | Weighted average stated interest rate is calculated based upon the principal amounts outstanding. | ||||
(3) | The amount of floating rate debt is comprised of the $157 million outstanding balance as of September 30, 2023 on the $600 million unsecured revolving credit facility, the entire principal balance of the $200 million unsecured term loan that closed in 2022, and the entire principal balance of the $215 million unsecured term loan that closed in 2023. | ||||
(4) | For loans that provide extension options that are conditional solely upon the Company providing proper notice to the loan's administrative agent and the payment of an extension fee, the final extended maturity date is reflected herein. |
Facility (1) | Property | Stated Rate | Maturity | Principal Amount Outstanding as of September 30, 2023 | |||||||||||||
Secured | |||||||||||||||||
$197.0 Million Fixed-Rate Mortgage | 1180 Peachtree Street | 4.10 | % | (2) | 10/1/2028 | 196,721 | |||||||||||
Subtotal / Weighted Average (3) | 4.10 | % | $ | 196,721 | |||||||||||||
Unsecured | |||||||||||||||||
$400.0 Million Unsecured 2014 Senior Notes (4) | N/A | 4.45 | % | (5) | 3/15/2024 | 50,154 | |||||||||||
$215.0 Million Unsecured 2023 Term Loan (6) | N/A | 6.45 | % | (7) | 1/31/2025 | 215,000 | |||||||||||
$250.0 Million Unsecured 2018 Term Loan | N/A | 4.54 | % | (8) | 3/31/2025 | 250,000 | |||||||||||
$200.0 Million Unsecured 2022 Term Loan (9) | N/A | 6.43 | % | (10) | 6/18/2025 | 200,000 | |||||||||||
$600.0 Million Unsecured Line of Credit (11) | N/A | 6.24 | % | (12) | 6/30/2027 | 157,000 | |||||||||||
$400.0 Million Unsecured 2023 Senior Notes | N/A | 9.25 | % | (13) | 7/20/2028 | 400,000 | |||||||||||
$300.0 Million Unsecured 2020 Senior Notes | N/A | 3.15 | % | (14) | 8/15/2030 | 300,000 | |||||||||||
$300.0 Million Unsecured 2021 Senior Notes | N/A | 2.75 | % | (15) | 4/1/2032 | 300,000 | |||||||||||
Subtotal / Weighted Average (3) | 5.60 | % | $ | 1,872,154 | |||||||||||||
Total Debt - Principal Amount Outstanding / Weighted Average Stated Rate (3) | 5.46 | % | $ | 2,068,875 | |||||||||||||
GAAP Accounting Adjustments (16) | $ | (18,556) | |||||||||||||||
Total Debt - GAAP Amount Outstanding | $ | 2,050,319 |
(1) | All of Piedmont's outstanding debt as of September 30, 2023, was interest-only debt with the exception of the $197 million mortgage associated with 1180 Peachtree Street in Atlanta, GA. | ||||
(2) | Upon acquiring the property, Piedmont assumed the mortgage. The stated interest rate of the loan was estimated to be an at-market rate as of the date of closing. Effective with the October 1, 2023 payment, the loan began amortizing based on a 30-year amortization schedule. | ||||
(3) | Weighted average is based on the principal amounts outstanding and interest rates at September 30, 2023. | ||||
(4) | Through a tender offer completed in July 2023, Piedmont repaid $349.9 million of its $400 million unsecured senior notes due in 2024, resulting in an outstanding principal balance of $50.2 million with a maturity date of March 15, 2024. | ||||
(5) | The $400 million unsecured senior notes were offered for sale at 99.791% of the principal amount. The resulting effective cost of the financing is approximately 4.48% before the consideration of transaction costs and proceeds from interest rate hedges. After the application of proceeds from interest rate hedges, the effective cost of the financing is approximately 4.10%. | ||||
(6) | The $215 million unsecured term loan has an initial maturity date of January 31, 2024. There is a one-year extension option available under the facility for a final maturity of January 31, 2025. The final extended maturity date is presented on this schedule. | ||||
(7) | The $215 million unsecured term loan has a variable interest rate. Piedmont may select from multiple interest rate options, including the prime rate and various SOFR rates. The all-in interest rate associated with each SOFR interest period selection is comprised of the relevant adjusted SOFR rate (comprised of the relevant base SOFR interest rate plus a fixed adjustment of 0.10%) plus a credit spread (1.05% as of September 30, 2023) based on Piedmont's then current credit rating. | ||||
(8) | The $250 million unsecured term loan has a stated variable interest rate; however, Piedmont entered into various interest rate swap agreements in a total notional amount equal to the size of the facility which effectively fix the interest rate for the term loan (at 4.54% as of September 30, 2023; this rate can change only with a credit rating change for the Company) through the loan's maturity date of March 31, 2025. | ||||
(9) | The $200 million unsecured term loan has an initial maturity date of December 16, 2024. There is a six-month extension option available under the facility for a final maturity of June 18, 2025. The final extended maturity date is presented on this schedule. | ||||
(10) | The $200 million unsecured term loan has a variable interest rate. Piedmont may select from multiple interest rate options, including the prime rate and various term SOFR rates. The all-in interest rate associated with each SOFR interest period selection is comprised of the relevant adjusted SOFR rate (comprised of the relevant base SOFR interest rate plus a fixed adjustment of 0.10%) plus a credit spread (1.00% as of September 30, 2023) based on Piedmont's then current credit rating. | ||||
(11) | All of Piedmont’s outstanding debt as of September 30, 2023 was term debt with the exception of the $157 million balance on our unsecured revolving credit facility. The $600 million unsecured revolving credit facility has an initial maturity date of June 30, 2026; however, there are two, six-month extension options available under the facility providing for a total extension of up to one year to June 30, 2027. The final extended maturity date is presented on this schedule. | ||||
(12) | The interest rate presented for the $600 million unsecured revolving credit facility is the weighted average interest rate for all outstanding draws as of September 30, 2023. Piedmont may select from multiple interest rate options with each draw under the facility, including the prime rate and various SOFR rates. The all-in interest rate associated with each SOFR interest period selection is comprised of the relevant adjusted SOFR rate (comprised of the relevant base SOFR interest rate plus a fixed adjustment of 0.10%) plus a credit spread (0.84% as of September 30, 2023) based on Piedmont's then current credit rating. | ||||
(13) | The $400 million unsecured senior notes were offered for sale at 99.000% of the principal amount. The resulting effective cost of the financing is approximately 9.50% before the consideration of transaction costs. | ||||
(14) | The $300 million unsecured senior notes were offered for sale at 99.236% of the principal amount. The resulting effective cost of the financing is approximately 3.24% before the consideration of transaction costs and the impact of interest rate hedges. After incorporating the results of the related interest rate hedging activity, the effective cost of the financing is approximately 3.90%. | ||||
(15) | The $300 million unsecured senior notes were offered for sale at 99.510% of the principal amount. The resulting effective cost of the financing is approximately 2.80% before the consideration of transaction costs and the impact of interest rate hedges. After incorporating the results of the related interest rate hedging activity, the effective cost of the financing is approximately 2.78%. | ||||
(16) | The GAAP accounting adjustments relate to original issue discounts, third-party fees, and lender fees resulting from the procurement processes for our various debt facilities. The original issue discounts and fees are amortized to interest expense over the contractual term of the related debt. |
Three Months Ended | ||||||||||||||||||||
Bank Debt Covenant Compliance (1) | Required | 9/30/2023 | 6/30/2023 | 3/31/2023 | 12/31/2022 | 9/30/2022 | ||||||||||||||
Maximum leverage ratio | 0.60 | 0.36 | 0.37 | 0.38 | 0.39 | 0.40 | ||||||||||||||
Minimum fixed charge coverage ratio (2) | 1.50 | 3.16 | 3.52 | 3.91 | 4.36 | 4.82 | ||||||||||||||
Maximum secured indebtedness ratio | 0.40 | 0.03 | 0.04 | 0.04 | 0.04 | 0.04 | ||||||||||||||
Minimum unencumbered leverage ratio | 1.60 | 2.74 | 2.66 | 2.64 | 2.56 | 2.46 | ||||||||||||||
Minimum unencumbered interest coverage ratio (3) | 1.75 | 3.28 | 3.67 | 4.10 | 4.55 | 4.93 |
Three Months Ended | ||||||||||||||||||||
Bond Covenant Compliance (4) | Required | 9/30/2023 | 6/30/2023 | 3/31/2023 | 12/31/2022 | 9/30/2022 | ||||||||||||||
Total debt to total assets | 60% or less | 44.7% | 44.8% | 47.1% | 44.0% | 46.8% | ||||||||||||||
Secured debt to total assets | 40% or less | 4.3% | 4.3% | 4.2% | 4.3% | 4.3% | ||||||||||||||
Ratio of consolidated EBITDA to interest expense | 1.50 or greater | 3.56 | 3.97 | 4.44 | 4.95 | 5.49 | ||||||||||||||
Unencumbered assets to unsecured debt | 150% or greater | 223% | 223% | 211% | 227% | 212% | ||||||||||||||
Three Months Ended | Nine Months Ended | Twelve Months Ended | |||||||||
Other Debt Coverage Ratios for Debt Holders | September 30, 2023 | September 30, 2023 | December 31, 2022 | ||||||||
Average net principal amount of debt to core EBITDA (5) | 6.4 x | 6.4 x | 6.0 x | ||||||||
Fixed charge coverage ratio (6) | 2.7 x | 3.1 x | 4.5 x | ||||||||
Interest coverage ratio (7) | 2.7 x | 3.1 x | 4.5 x |
(1) | Bank debt covenant compliance calculations relate to the most restrictive of the specific calculations detailed in the relevant credit agreements. Please refer to such agreements for relevant defined terms. | ||||
(2) | Defined as EBITDA for the trailing four quarters (including the Company's share of EBITDA from unconsolidated interests), excluding one-time or non-recurring gains or losses, less a $0.15 per square foot capital reserve, and excluding the impact of straight line rent leveling adjustments and amortization of intangibles divided by the Company's share of fixed charges, as more particularly described in the credit agreements. This definition of fixed charge coverage ratio as prescribed by our credit agreements is different from the fixed charge coverage ratio definition employed elsewhere within this report. | ||||
(3) | Defined as net operating income for the trailing four quarters for unencumbered assets (including the Company's share of net operating income from partially-owned entities and subsidiaries that are deemed to be unencumbered) less a $0.15 per square foot capital reserve divided by the Company's share of interest expense associated with unsecured financings only, as more particularly described in the credit agreements. | ||||
(4) | Bond covenant compliance calculations relate to specific calculations prescribed in the relevant debt agreements. Please refer to the Indenture and the First Supplemental Indenture dated March 6, 2014, the Second Supplemental Indenture dated August 12, 2020, the Third Supplemental Indenture dated September 20, 2021, and the Fourth Supplemental Indenture dated July 20, 2023 for defined terms and detailed information about the calculations. | ||||
(5) | For the purposes of this calculation, we use the average daily principal balance of debt outstanding during the identified period, less the average of cash and cash equivalents and escrow deposits and restricted cash as of the end of each month in the relevant period. | ||||
(6) | Fixed charge coverage ratio is calculated as Core EBITDA divided by the sum of interest expense, principal amortization, capitalized interest and preferred dividends (none during periods presented). The Company had principal amortization of $0.3 million for the three months ended September 30, 2023, $0.3 million for the nine months ended September 30, 2023, and none for the twelve months ended December 31, 2022. The Company had capitalized interest of $1.9 million for the three months ended September 30, 2023, $4.5 million for the nine months ended September 30, 2023, and $4.2 million for the twelve months ended December 31, 2022. | ||||
(7) | Interest coverage ratio is calculated as Core EBITDA divided by the sum of interest expense and capitalized interest. The Company had capitalized interest of $1.9 million for the three months ended September 30, 2023, $4.5 million for the nine months ended September 30, 2023, and $4.2 million for the twelve months ended December 31, 2022. |
Tenant | Credit Rating (2) | Number of Properties | Lease Term Remaining (3) | Annualized Lease Revenue | Percentage of Annualized Lease Revenue (%) | Leased Square Footage | Percentage of Leased Square Footage (%) | |||||||||||||||||||
US Bancorp (4) | A / A3 | 3 | 0.7 | $28,092 | 4.9 | 787 | 5.5 | |||||||||||||||||||
State of New York | AA+ / Aa1 | 1 | 13.0 | 25,564 | 4.5 | 482 | 3.3 | |||||||||||||||||||
Amazon | AA / A1 | 4 | 1.2 | 16,633 | 2.9 | 337 | 2.3 | |||||||||||||||||||
City of New York | AA / Aa2 | 1 | 2.7 | 15,628 | 2.7 | 313 | 2.2 | |||||||||||||||||||
Microsoft | AAA / Aaa | 2 | 7.7 | 13,475 | 2.4 | 355 | 2.5 | |||||||||||||||||||
King & Spalding | No Rating Available | 1 | 7.4 | 12,628 | 2.2 | 272 | 1.9 | |||||||||||||||||||
Transocean | CCC+ / Caa1 | 1 | 12.6 | 11,542 | 2.0 | 301 | 2.1 | |||||||||||||||||||
Ryan | No Rating Available | 1 | 2.3 | 9,365 | 1.6 | 178 | 1.2 | |||||||||||||||||||
VMware, Inc. | BBB- / Baa3 | 1 | 3.8 | 8,979 | 1.6 | 215 | 1.5 | |||||||||||||||||||
Schlumberger Technology | A / A2 | 1 | 5.3 | 8,106 | 1.4 | 254 | 1.8 | |||||||||||||||||||
Gartner | BBB- / Ba1 | 2 | 10.8 | 7,864 | 1.4 | 207 | 1.4 | |||||||||||||||||||
Salesforce.com | A+ / A2 | 1 | 5.8 | 7,465 | 1.3 | 182 | 1.3 | |||||||||||||||||||
Fiserv | BBB / Baa2 | 1 | 3.8 | 7,373 | 1.3 | 195 | 1.4 | |||||||||||||||||||
Epsilon Data Management / subsidiary of Publicis | BBB+ / Baa1 | 1 | 2.8 | 7,016 | 1.2 | 222 | 1.5 | |||||||||||||||||||
Applied Predictive Technologies / subsidiary of MasterCard | A+ / Aa3 | 1 | 4.7 | 6,783 | 1.2 | 133 | 0.9 | |||||||||||||||||||
Eversheds Sutherland | No Rating Available | 1 | 2.6 | 6,567 | 1.2 | 180 | 1.2 | |||||||||||||||||||
International Food Policy Research Institute | No Rating Available | 1 | 5.6 | 6,479 | 1.1 | 102 | 0.7 | |||||||||||||||||||
Cargill | A / A2 | 1 | 0.3 | 5,625 | 1.0 | 268 | 1.9 | |||||||||||||||||||
Other | Various | 366,592 | 64.1 | 9,436 | 65.4 | |||||||||||||||||||||
Total | $571,776 | 100.0 | 14,419 | 100.0 |
(1) | This schedule presents all tenants contributing 1.0% or more to Annualized Lease Revenue. | ||||
(2) | Credit rating may reflect the credit rating of the parent or a guarantor. When available, both the Standard & Poor's credit rating and the Moody's credit rating are provided. The absence of a credit rating for a tenant is not an indication of the creditworthiness of the tenant; in most cases, the lack of a credit rating reflects that the tenant has not sought such a rating. | ||||
(3) | The metrics presented are the weighted average lease terms remaining in years weighted by Annualized Lease Revenue. | ||||
(4) | Subsequent to quarter end, a renewal was executed with US Bancorp to extend its entire 447,000 square foot headquarters lease at US Bancorp Center in downtown Minneapolis through 2034. The lease term remaining presented as of September 30, 2023 does not reflect this renewal. | ||||
Rating Level (1) | Annualized Lease Revenue (in thousands) | Percentage of Annualized Lease Revenue (%) | ||||||
AAA / Aaa | $22,308 | 3.9 | ||||||
AA / Aa | 71,547 | 12.5 | ||||||
A / A | 76,866 | 13.5 | ||||||
BBB / Baa | 63,704 | 11.1 | ||||||
BB / Ba | 13,067 | 2.3 | ||||||
B / B | 7,809 | 1.4 | ||||||
Below | 20,134 | 3.5 | ||||||
Not rated (2) | 296,341 | 51.8 | ||||||
Total | $571,776 | 100.0 | ||||||
Lease Size | Number of Leases | Percentage of Leases (%) | Annualized Lease Revenue (in thousands) | Percentage of Annualized Lease Revenue (%) | Leased Square Footage (in thousands) | Percentage of Leased Square Footage (%) | ||||||||||||||
2,500 or Less | 360 | 36.6 | $24,386 | 4.3 | 240 | 1.7 | ||||||||||||||
2,501 - 10,000 | 354 | 35.9 | 70,593 | 12.4 | 1,814 | 12.6 | ||||||||||||||
10,001 - 20,000 | 103 | 10.5 | 53,709 | 9.4 | 1,404 | 9.7 | ||||||||||||||
20,001 - 40,000 | 91 | 9.2 | 95,729 | 16.7 | 2,458 | 17.0 | ||||||||||||||
40,001 - 100,000 | 48 | 4.9 | 117,289 | 20.5 | 2,978 | 20.7 | ||||||||||||||
Greater than 100,000 | 29 | 2.9 | 210,070 | 36.7 | 5,525 | 38.3 | ||||||||||||||
Total | 985 | 100.0 | $571,776 | 100.0 | 14,419 | 100.0 | ||||||||||||||
(1) | Credit rating may reflect the credit rating of the parent or a guarantor. Where differences exist between the Standard & Poor's credit rating for a tenant and the Moody's credit rating for a tenant, the higher credit rating is selected for this analysis. | ||||
(2) | The classification of a tenant as "not rated" is not an indication of the creditworthiness of the tenant; in most cases, the lack of a credit rating reflects that the tenant has not sought such a rating. Included in this category are such tenants as Piper Sandler, Ernst & Young, KPMG, BDO, and RaceTrac Petroleum. |
Three Months Ended | Three Months Ended | ||||||||||||||||||||||||||||
September 30, 2023 | September 30, 2022 | ||||||||||||||||||||||||||||
Leased Square Footage | Rentable Square Footage | Percent Leased (1) | Leased Square Footage | Rentable Square Footage | Percent Leased (1) | ||||||||||||||||||||||||
As of June 30, 20xx | 14,365 | 16,672 | 86.2 | % | 14,029 | 16,129 | 87.0 | % | |||||||||||||||||||||
Leases signed during the period | 302 | 444 | |||||||||||||||||||||||||||
Less: | |||||||||||||||||||||||||||||
Lease renewals signed during period | (132) | (320) | |||||||||||||||||||||||||||
New leases signed during period for currently occupied space | (47) | (10) | |||||||||||||||||||||||||||
Leases expired during period and other | (69) | (37) | (200) | 12 | |||||||||||||||||||||||||
Subtotal | 14,419 | 16,635 | 86.7 | % | 13,943 | 16,141 | 86.4 | % | |||||||||||||||||||||
Acquisitions and properties placed in service during period (2) | — | — | 663 | 691 | |||||||||||||||||||||||||
Dispositions and properties taken out of service during period (2) | — | — | — | — | |||||||||||||||||||||||||
As of September 30, 20xx | 14,419 | 16,635 | 86.7 | % | 14,606 | 16,832 | 86.8 | % | |||||||||||||||||||||
Nine Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||
September 30, 2023 | September 30, 2022 | ||||||||||||||||||||||||||||
Leased Square Footage | Rentable Square Footage | Percent Leased (1) | Leased Square Footage | Rentable Square Footage | Percent Leased (1) | ||||||||||||||||||||||||
As of December 31, 20xx | 14,440 | 16,658 | 86.7 | % | 14,583 | 17,051 | 85.5 | % | |||||||||||||||||||||
Leases signed during the period | 1,427 | 1,720 | |||||||||||||||||||||||||||
Less: | |||||||||||||||||||||||||||||
Lease renewals signed during period | (751) | (1,120) | |||||||||||||||||||||||||||
New leases signed during period for currently occupied space | (157) | (66) | |||||||||||||||||||||||||||
Leases expired during period and other | (540) | (23) | (568) | 15 | |||||||||||||||||||||||||
Subtotal | 14,419 | 16,635 | 86.7 | % | 14,549 | 17,066 | 85.3 | % | |||||||||||||||||||||
Acquisitions and properties placed in service during period (2) | — | — | 663 | 691 | |||||||||||||||||||||||||
Dispositions and properties taken out of service during period (2) | — | — | (606) | (925) | |||||||||||||||||||||||||
As of September 30, 20xx | 14,419 | 16,635 | 86.7 | % | 14,606 | 16,832 | 86.8 | % | |||||||||||||||||||||
Same Store Analysis | |||||||||||||||||||||||||||||
Less acquisitions / dispositions after September 30, 2022 and developments / out-of-service redevelopments (2) (3) | — | — | — | % | (170) | (175) | 97.1 | % | |||||||||||||||||||||
Same Store Leased Percentage | 14,419 | 16,635 | 86.7 | % | 14,436 | 16,657 | 86.7 | % | |||||||||||||||||||||
(1) | Calculated as square footage associated with commenced leases as of period end with the addition of square footage associated with uncommenced leases for spaces vacant as of period end at our in-service properties, divided by total rentable in-service square footage as of period end, expressed as a percentage. | ||||
(2) | |||||
(3) | Dispositions completed during the previous twelve months are deducted from the previous period data and acquisitions completed during the previous twelve months are deducted from the current period data. Redevelopments that commenced during the previous twelve months that were taken out of service are deducted from the previous period data and developments and previously out of service redevelopments that were placed in service during the previous twelve months are deducted from the current period data. |
Three Months Ended | ||||||||||||||||||||
September 30, 2023 | ||||||||||||||||||||
Square Feet | % of Total Signed During Period | % of Rentable Square Footage | % Change Cash Rents (2) | % Change Accrual Rents (3) | ||||||||||||||||
Leases executed for spaces vacant one year or less | 94 | 31.2% | 0.6% | 11.7% | 10.3% | |||||||||||||||
Leases executed for spaces excluded from analysis (4) | 208 | 68.8% |
Nine Months Ended | ||||||||||||||||||||
September 30, 2023 | ||||||||||||||||||||
Square Feet | % of Total Signed During Period | % of Rentable Square Footage | % Change Cash Rents (2) | % Change Accrual Rents (3) | ||||||||||||||||
Leases executed for spaces vacant one year or less | 593 | 41.6% | 3.6% | 9.8% | 13.5% | |||||||||||||||
Leases executed for spaces excluded from analysis (4) | 834 | 58.4% | ||||||||||||||||||
(1) | The populations analyzed for this analysis consist of consolidated leases executed during the relevant period with lease terms of greater than one year. Leases associated with storage spaces, retail spaces, management offices, and newly acquired assets for which there is less than one year of operating history, along with percentage rent leases, are excluded from this analysis. | ||||
(2) | For the purposes of this analysis, the last twelve months of cash paying rents of the previous leases are compared to the first twelve months of cash paying rents of the new leases in order to calculate the percentage change. | ||||
(3) | For the purposes of this analysis, the accrual basis rents of the previous leases are compared to the accrual basis rents of the new leases in order to calculate the percentage change. For newly signed leases which have variations in accrual basis rents, whether because of known future expansions, contractions, lease expense recovery structure changes, or other similar reasons, the weighted average of such varying accrual basis rents is used for the purposes of this analysis. | ||||
(4) | Represents leases signed at our consolidated office assets that do not qualify for inclusion in the analysis, primarily because the spaces for which the new leases were signed had been vacant for more than one year. | ||||
Expiration Year | Annualized Lease Revenue (1) | Percentage of Annualized Lease Revenue (%) | Rentable Square Footage | Percentage of Rentable Square Footage (%) | |||||||||||||
Vacant | $— | — | 2,216 | 13.3 | |||||||||||||
2023 (2) | 12,304 | 2.1 | 466 | 2.8 | |||||||||||||
2024 (3) | 63,429 | 11.1 | 1,790 | 10.8 | |||||||||||||
2025 | 67,975 | 11.9 | 1,692 | 10.2 | |||||||||||||
2026 | 64,538 | 11.3 | 1,628 | 9.8 | |||||||||||||
2027 | 53,041 | 9.3 | 1,390 | 8.3 | |||||||||||||
2028 | 70,185 | 12.3 | 1,812 | 10.9 | |||||||||||||
2029 | 53,808 | 9.4 | 1,291 | 7.8 | |||||||||||||
2030 | 25,343 | 4.4 | 684 | 4.1 | |||||||||||||
2031 | 28,087 | 4.9 | 723 | 4.3 | |||||||||||||
2032 | 22,759 | 4.0 | 567 | 3.4 | |||||||||||||
2033 | 11,014 | 1.9 | 244 | 1.5 | |||||||||||||
2034 | 19,566 | 3.4 | 499 | 3.0 | |||||||||||||
2035 | 19,195 | 3.4 | 504 | 3.0 | |||||||||||||
Thereafter | 60,532 | 10.6 | 1,129 | 6.8 | |||||||||||||
Total | $571,776 | 100.0 | 16,635 | 100.0 |
Average Lease Term Remaining | |||||
9/30/2023 | 5.5 years | ||||
12/31/2022 | 5.6 years |
(1) | Annualized rental income associated with each newly executed lease for currently occupied space is incorporated herein only at the expiration date for the current lease. Annualized rental income associated with each such new lease is removed from the expiry year of the current lease and added to the expiry year of the new lease. These adjustments effectively incorporate known roll ups and roll downs into the expiration schedule. | ||||
(2) | Includes leases with an expiration date of September 30, 2023, comprised of approximately 28,000 square feet and Annualized Lease Revenue of $1.1 million. | ||||
(3) | Leases and other revenue-producing agreements on a month-to-month basis, comprised of approximately 39,000 square feet and Annualized Lease Revenue of $1.8 million, are assigned a lease expiration date of a year and a day beyond the period end date. |
Q4 2023 (1) | Q1 2024 | Q2 2024 | Q3 2024 | |||||||||||||||||||||||||||||||||||
Location | Expiring Square Footage | Expiring Lease Revenue (2) | Expiring Square Footage | Expiring Lease Revenue (2) | Expiring Square Footage | Expiring Lease Revenue (2) | Expiring Square Footage | Expiring Lease Revenue (2) | ||||||||||||||||||||||||||||||
Atlanta | 30 | $1,166 | 21 | $811 | 35 | $1,259 | 85 | $3,170 | ||||||||||||||||||||||||||||||
Boston | — | — | 7 | 306 | — | — | 1 | 51 | ||||||||||||||||||||||||||||||
Dallas | 54 | 2,213 | 4 | 180 | 72 | 2,657 | 21 | 985 | ||||||||||||||||||||||||||||||
Minneapolis | 311 | 7,356 | 17 | 587 | 789 | 28,184 | 32 | 1,315 | ||||||||||||||||||||||||||||||
New York | 3 | 138 | 2 | 85 | — | — | 1 | 137 | ||||||||||||||||||||||||||||||
Orlando | 54 | 1,234 | 228 | 3,413 | 40 | 1,472 | 8 | 281 | ||||||||||||||||||||||||||||||
Washington, D.C. | 10 | 508 | 75 | 4,069 | 60 | 2,986 | 29 | 1,343 | ||||||||||||||||||||||||||||||
Other | 4 | 69 | — | — | — | 5 | — | — | ||||||||||||||||||||||||||||||
Total (3) | 466 | $12,684 | 354 | $9,451 | 996 | $36,563 | 177 | $7,282 |
(1) | Includes leases with an expiration date of September 30, 2023, comprised of approximately 28,000 square feet and expiring lease revenue of $1.1 million. No such adjustments are made to other periods presented. | ||||
(2) | Expiring Lease Revenue is calculated as expiring square footage multiplied by the gross rent per square foot of the tenant currently leasing the space. | ||||
(3) | Total expiring lease revenue in any given year will not tie to the expiring Annualized Lease Revenue presented on the Lease Expiration Schedule on the previous page as the Lease Expiration Schedule accounts for the revenue effects of newly signed leases. Reflected herein are expiring revenues based on in-place rental rates. | ||||
12/31/2023 (1) | 12/31/2024 | 12/31/2025 | 12/31/2026 | 12/31/2027 | ||||||||||||||||||||||||||||||||||||||||
Location | Expiring Square Footage | Expiring Lease Revenue (2) | Expiring Square Footage | Expiring Lease Revenue (2) | Expiring Square Footage | Expiring Lease Revenue (2) | Expiring Square Footage | Expiring Lease Revenue (2) | Expiring Square Footage | Expiring Lease Revenue (2) | ||||||||||||||||||||||||||||||||||
Atlanta | 30 | $1,166 | 208 | $8,009 | 423 | $14,674 | 499 | $18,701 | 604 | $23,227 | ||||||||||||||||||||||||||||||||||
Boston | — | — | 14 | 587 | 149 | 5,381 | 16 | 534 | 27 | 788 | ||||||||||||||||||||||||||||||||||
Dallas | 54 | 2,213 | 156 | 6,178 | 638 | 29,594 | 383 | 13,041 | 217 | 7,523 | ||||||||||||||||||||||||||||||||||
Minneapolis | 311 | 7,356 | 893 | 31,887 | 229 | 9,185 | 28 | 1,065 | 208 | 7,178 | ||||||||||||||||||||||||||||||||||
New York | 3 | 138 | 35 | 1,977 | 10 | 507 | 313 | 15,640 | 15 | 725 | ||||||||||||||||||||||||||||||||||
Orlando | 54 | 1,234 | 311 | 6,657 | 211 | 7,083 | 286 | 9,919 | 212 | 7,724 | ||||||||||||||||||||||||||||||||||
Washington, D.C. | 10 | 508 | 173 | 8,868 | 32 | 2,419 | 103 | 5,392 | 107 | 5,877 | ||||||||||||||||||||||||||||||||||
Other | 4 | 69 | — | 5 | — | — | — | — | — | 5 | ||||||||||||||||||||||||||||||||||
Total (3) | 466 | $12,684 | 1,790 | $64,168 | 1,692 | $68,843 | 1,628 | $64,292 | 1,390 | $53,047 |
(1) | Includes leases with an expiration date of September 30, 2023, comprised of approximately 28,000 square feet and expiring lease revenue of $1.1 million. No such adjustments are made to other periods presented. | ||||
(2) | Expiring Lease Revenue is calculated as expiring square footage multiplied by the gross rent per square foot of the tenant currently leasing the space. | ||||
(3) | Total expiring lease revenue in any given year will not tie to the expiring Annualized Lease Revenue presented on the Lease Expiration Schedule on page 24 as the Lease Expiration Schedule accounts for the revenue effects of newly signed leases. Reflected herein are expiring revenues based on in-place rental rates. | ||||
Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2023 | For the Year Ended | 2019 to 2023 (Weighted Average Total) | ||||||||||||||||||||||||||||||||
2022 | 2021 | 2020 | 2019 | ||||||||||||||||||||||||||||||||
Total Leasing Transactions | |||||||||||||||||||||||||||||||||||
Square feet | 298,929 | 1,423,520 | 2,142,852 | 2,247,366 | 1,103,248 | 2,730,332 | 9,647,318 | ||||||||||||||||||||||||||||
Tenant improvements per square foot per year of lease term (1) | $4.36 | $4.15 | $3.22 | $2.78 | $4.30 | $4.21 | $3.69 | ||||||||||||||||||||||||||||
Leasing commissions per square foot per year of lease term | $2.30 | $2.31 | $2.22 | $1.67 | $1.89 | $1.70 | $1.90 | ||||||||||||||||||||||||||||
Total per square foot per year of lease term | $6.66 | $6.46 | $5.44 | $4.45 | $6.19 | $5.91 | $5.59 | ||||||||||||||||||||||||||||
Less Adjustment for Commitment Expirations (2) | |||||||||||||||||||||||||||||||||||
Expired tenant improvements (not paid out) per square foot per year of lease term | -$0.78 | -$0.26 | -$0.10 | -$0.20 | -$0.40 | -$0.05 | -$0.15 | ||||||||||||||||||||||||||||
Adjusted total per square foot per year of lease term | $5.88 | $6.20 | $5.34 | $4.25 | $5.79 | $5.86 | $5.44 | ||||||||||||||||||||||||||||
NOTE: | This information is presented for our consolidated office assets only and excludes activity associated with storage and license spaces. | ||||
(1) | For leases under which a tenant may use, at its discretion, a portion of its tenant improvement allowance for expenses other than those related to improvements to its space, an assumption is made that the tenant elects to use any such portion of its tenant improvement allowance for improvements to its space prior to the commencement of its lease, unless the Company is notified otherwise by the tenant. This assumption is made based upon historical usage patterns of tenant improvement allowances by the Company's tenants. | ||||
(2) | The Company has historically reported the maximum amount of capital to which it committed in leasing transactions as of the signing of the leases with no subsequent updates for variations and/or changes in tenants' uses of tenant improvement allowances. Many times, tenants do not fully use the allowances provided in their leases or let portions of their tenant improvement allowances expire. In an effort to provide additional clarity on the actual costs of completed leasing transactions, tenant improvement allowances that expired or became no longer available to tenants are disclosed in this section and are deducted from the capital commitments per square foot of leased space in the periods in which they expired in an effort to provide a better estimation of leasing transaction costs over time. |
Location | Number of Properties | Annualized Lease Revenue | Percentage of Annualized Lease Revenue (%) | Rentable Square Footage | Percentage of Rentable Square Footage (%) | Leased Square Footage | Percent Leased (%) | |||||||||||||||||||
Atlanta | 11 | $159,510 | 27.9 | 4,722 | 28.4 | 4,174 | 88.4 | |||||||||||||||||||
Dallas | 13 | 113,769 | 19.9 | 3,527 | 21.2 | 2,882 | 81.7 | |||||||||||||||||||
Minneapolis | 6 | 66,631 | 11.7 | 2,104 | 12.6 | 1,910 | 90.8 | |||||||||||||||||||
Washington, D.C. | 6 | 66,030 | 11.5 | 1,589 | 9.6 | 1,240 | 78.0 | |||||||||||||||||||
Orlando | 6 | 58,466 | 10.2 | 1,764 | 10.6 | 1,664 | 94.3 | |||||||||||||||||||
New York | 1 | 48,581 | 8.5 | 1,045 | 6.3 | 912 | 87.3 | |||||||||||||||||||
Boston | 6 | 39,060 | 6.8 | 1,270 | 7.6 | 1,077 | 84.8 | |||||||||||||||||||
Other | 2 | 19,729 | 3.5 | 614 | 3.7 | 560 | 91.2 | |||||||||||||||||||
Total / Weighted Average | 51 | $571,776 | 100.0 | 16,635 | 100.0 | 14,419 | 86.7 |
CBD | URBAN INFILL / SUBURBAN | TOTAL | ||||||||||||||||||||||||||||||||||||||||||||||||
Location | State | Number of Properties | Percentage of Annualized Lease Revenue (%) | Rentable Square Footage | Percentage of Rentable Square Footage (%) | Number of Properties | Percentage of Annualized Lease Revenue (%) | Rentable Square Footage | Percentage of Rentable Square Footage (%) | Number of Properties | Percentage of Annualized Lease Revenue (%) | Rentable Square Footage | Percentage of Rentable Square Footage (%) | |||||||||||||||||||||||||||||||||||||
Atlanta | GA | 2 | 9.6 | 1,316 | 7.9 | 9 | 18.3 | 3,406 | 20.5 | 11 | 27.9 | 4,722 | 28.4 | |||||||||||||||||||||||||||||||||||||
Dallas | TX | — | — | — | — | 13 | 19.9 | 3,527 | 21.2 | 13 | 19.9 | 3,527 | 21.2 | |||||||||||||||||||||||||||||||||||||
Minneapolis | MN | 1 | 5.9 | 937 | 5.6 | 5 | 5.8 | 1,167 | 7.0 | 6 | 11.7 | 2,104 | 12.6 | |||||||||||||||||||||||||||||||||||||
Washington, D.C. | DC, VA | 3 | 5.0 | 691 | 4.2 | 3 | 6.5 | 898 | 5.4 | 6 | 11.5 | 1,589 | 9.6 | |||||||||||||||||||||||||||||||||||||
Orlando | FL | 4 | 8.4 | 1,455 | 8.7 | 2 | 1.8 | 309 | 1.9 | 6 | 10.2 | 1,764 | 10.6 | |||||||||||||||||||||||||||||||||||||
New York | NY | 1 | 8.5 | 1,045 | 6.3 | — | — | — | — | 1 | 8.5 | 1,045 | 6.3 | |||||||||||||||||||||||||||||||||||||
Boston | MA | — | — | — | — | 6 | 6.8 | 1,270 | 7.6 | 6 | 6.8 | 1,270 | 7.6 | |||||||||||||||||||||||||||||||||||||
Other | — | — | — | — | 2 | 3.5 | 614 | 3.7 | 2 | 3.5 | 614 | 3.7 | ||||||||||||||||||||||||||||||||||||||
Total | 11 | 37.4 | 5,444 | 32.7 | 40 | 62.6 | 11,191 | 67.3 | 51 | 100.0 | 16,635 | 100.0 |
Percentage of | |||||||||||||||||||||||
Number of | Percentage of Total | Annualized Lease | Annualized Lease | Leased Square | Percentage of Leased | ||||||||||||||||||
Industry | Tenants | Tenants (%) | Revenue | Revenue (%) | Footage | Square Footage (%) | |||||||||||||||||
Business Services | 81 | 11.2 | $85,769 | 15.0 | 2,203 | 15.3 | |||||||||||||||||
Engineering, Accounting, Research, Management & Related Services | 96 | 13.2 | 78,972 | 13.8 | 1,899 | 13.2 | |||||||||||||||||
Legal Services | 81 | 11.2 | 57,634 | 10.1 | 1,425 | 9.9 | |||||||||||||||||
Governmental Entity | 5 | 0.7 | 48,231 | 8.4 | 938 | 6.5 | |||||||||||||||||
Depository Institutions | 22 | 3.0 | 38,427 | 6.7 | 1,038 | 7.2 | |||||||||||||||||
Real Estate | 50 | 6.9 | 28,845 | 5.0 | 835 | 5.8 | |||||||||||||||||
Oil and Gas Extraction | 5 | 0.7 | 22,783 | 4.0 | 644 | 4.5 | |||||||||||||||||
Miscellaneous Retail | 9 | 1.2 | 21,053 | 3.7 | 467 | 3.2 | |||||||||||||||||
Holding and Other Investment Offices | 36 | 5.0 | 20,537 | 3.6 | 499 | 3.5 | |||||||||||||||||
Security & Commodity Brokers, Dealers, Exchanges & Services | 51 | 7.0 | 19,235 | 3.4 | 489 | 3.4 | |||||||||||||||||
Health Services | 33 | 4.5 | 15,131 | 2.6 | 384 | 2.7 | |||||||||||||||||
Automotive Repair, Services & Parking | 9 | 1.2 | 12,961 | 2.3 | 8 | 0.1 | |||||||||||||||||
Insurance Agents, Brokers & Services | 20 | 2.8 | 11,859 | 2.1 | 341 | 2.4 | |||||||||||||||||
Membership Organizations | 17 | 2.3 | 11,039 | 1.9 | 215 | 1.5 | |||||||||||||||||
Eating & Drinking Places | 31 | 4.3 | 8,711 | 1.5 | 224 | 1.6 | |||||||||||||||||
Other | 180 | 24.8 | 90,589 | 15.9 | 2,810 | 19.2 | |||||||||||||||||
Total | 726 | 100.0 | $571,776 | 100.0 | 14,419 | 100.0 |
Property | Market / Submarket | Acquisition Period | Percent Ownership (%) | Year Built | Purchase Price | Rentable Square Footage | Percent Leased at Acquisition (%) | |||||||||||||||||||
1180 Peachtree Street | Atlanta / Midtown | Q3 2022 | 100 | 2005 | $465,665 | 691 | 96 | |||||||||||||||||||
Property | Market / Submarket | Disposition Period | Percent Ownership (%) | Year Built | Sale Price | Rentable Square Footage | Percent Leased at Disposition (%) | |||||||||||||||||||
Two Pierce Place | Chicago / Northwest | Q1 2022 | 100 | 1991 | $24,000 | 485 | 34 | |||||||||||||||||||
225 and 235 Presidential Way | Boston / Route 128 | Q1 2022 | 100 | 2001 and 2000 | 129,000 | 440 | 100 | |||||||||||||||||||
Cambridge Portfolio | Boston / Cambridge | Q4 2022 | 100 | Various | 160,225 | 175 | 94 | |||||||||||||||||||
Total / Weighted Average | $313,225 | 1,100 | 70 | |||||||||||||||||||||||
Property | Market / Submarket | Adjacent Piedmont Project | Acres | Real Estate Book Value | ||||||||||
Gavitello | Atlanta / Buckhead | The Medici | 2.0 | $2,592 | ||||||||||
Glenridge Highlands Three | Atlanta / Central Perimeter | Glenridge Highlands | 3.0 | 2,015 | ||||||||||
Galleria Atlanta | Atlanta / Northwest | Galleria | 16.3 | 24,225 | ||||||||||
State Highway 161 | Dallas / Las Colinas | Las Colinas Corporate Center | 4.5 | 3,320 | ||||||||||
Royal Lane | Dallas / Las Colinas | 6011, 6021 & 6031 Connection Drive | 10.6 | 2,837 | ||||||||||
John Carpenter Freeway | Dallas / Las Colinas | 750 West John Carpenter Freeway | 3.5 | 1,000 | ||||||||||
Galleria Dallas | Dallas / Lower North Tollway | Galleria Office Towers | 1.9 | 5,966 | ||||||||||
TownPark | Orlando / Lake Mary | 400 & 500 TownPark Commons | 18.9 | 9,123 | ||||||||||
Total | 60.7 | $51,078 |
Property | Market / Submarket | Adjacent Piedmont Property | Construction Type | Percent Leased (%) | Square Feet | Current Asset Basis | ||||||||||||||
222 South Orange Avenue (1) | Orlando / CBD | 200 South Orange Avenue | Redevelopment | 14.6 | 127 | $30.2 million |
(1) | The property was acquired on October 29, 2020 and was vacant at the time of acquisition. It shares a common lobby and atrium with the Company's 200 South Orange Avenue property. The redevelopment includes an enhanced window line and balconies, allowing more light and air into tenant spaces, along with renovations to the lobby, common areas and restrooms. | ||||
Included below are definitions of various terms used throughout this supplemental report, including definitions of certain non-GAAP financial measures and the reasons why the Company’s management believes these measures provide useful information to investors about the Company’s financial condition and results of operations. Reconciliations of any non-GAAP financial measures defined below are included beginning on page 35. | ||
Adjusted Funds From Operations ("AFFO"): The Company calculates AFFO by starting with Core FFO and adjusting for non-incremental capital expenditures and then adding back non-cash items including: non-real estate depreciation, straight-lined rents and fair value lease adjustments, non-cash components of interest expense and compensation expense, and by making similar adjustments for joint ventures, if any. AFFO is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of the Company’s operating performance. The Company believes that AFFO is helpful to investors as a meaningful supplemental comparative performance measure of our ability to make incremental capital investments. Other REITs may not define AFFO in the same manner as the Company; therefore, the Company’s computation of AFFO may not be comparable to that of other REITs. | ||
Annualized Lease Revenue ("ALR"): ALR is calculated by multiplying (i) rental payments (defined as base rent plus operating expense reimbursements, if payable by the tenant on a monthly basis under the terms of a lease that has been executed, but excluding a) rental abatements and b) rental payments related to executed but not commenced leases for space that was covered by an existing lease), by (ii) 12. In instances in which contractual rents or operating expense reimbursements are collected on an annual, semi-annual, or quarterly basis, such amounts are multiplied by a factor of 1, 2, or 4, respectively, to calculate the annualized figure. For leases that have been executed but not commenced relating to un-leased space, ALR is calculated by multiplying (i) the monthly base rental payment (excluding abatements) plus any operating expense reimbursements for the initial month of the lease term, by (ii) 12. Unless stated otherwise, this measure excludes revenues associated with development properties and properties taken out of service for redevelopment, if any. | ||
Core EBITDA: The Company calculates Core EBITDA as net income/(loss) (computed in accordance with GAAP) before interest, taxes, depreciation and amortization and removing any impairment charges, gains or losses from sales of property and other significant infrequent items that create volatility within our earnings and make it difficult to determine the earnings generated by our core ongoing business. Core EBITDA is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of the Company’s operating performance. The Company believes that Core EBITDA is helpful to investors as a supplemental performance measure because it provides a metric for understanding the performance of the Company’s results from ongoing operations without taking into account the effects of non-cash expenses (such as depreciation and amortization), as well as items that are not part of normal day-to-day operations of the Company’s business. Other REITs may not define Core EBITDA in the same manner as the Company; therefore, the Company’s computation of Core EBITDA may not be comparable to that of other REITs. | ||
Core Funds From Operations ("Core FFO"): The Company calculates Core FFO by starting with FFO, as defined by NAREIT, and adjusting for gains or losses on the extinguishment of swaps and/or debt and any significant non-recurring items. Core FFO is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of the Company’s operating performance. The Company believes that Core FFO is helpful to investors as a supplemental performance measure because it excludes the effects of certain infrequent or non-recurring items which can create significant earnings volatility, but which do not directly relate to the Company’s core business operations. As a result, the Company believes that Core FFO can help facilitate comparisons of operating performance between periods and provides a more meaningful predictor of future earnings potential. Other REITs may not define Core FFO in the same manner as the Company; therefore, the Company’s computation of Core FFO may not be comparable to that of other REITs. | ||
EBITDA: EBITDA is defined as net income/(loss) before interest, taxes, depreciation and amortization. | ||
EBITDAre: The Company calculates EBITDAre in accordance with the current National Association of Real Estate Investment Trusts (“NAREIT”) definition. NAREIT currently defines EBITDAre as net income/(loss) (computed in accordance with GAAP) adjusted for gains or losses from sales of property, impairment charges, depreciation on real estate assets, amortization on real estate assets, interest expense and taxes, along with the same adjustments for joint ventures. Some of the adjustments mentioned can vary among owners of identical assets in similar conditions based on historical cost accounting and useful-life estimates. EBITDAre is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of the Company’s operating performance. The Company believes that EBITDAre is helpful to investors as a supplemental performance measure because it provides a metric for understanding the Company’s results from ongoing operations without taking into account the effects of non-cash expenses (such as depreciation and amortization) and capitalization and capital structure expenses (such as interest expense and taxes). The Company also believes that EBITDAre can help facilitate comparisons of operating performance between periods and with other REITs. However, other REITs may not define EBITDAre in accordance with the NAREIT definition, or may interpret the current NAREIT definition differently than the Company; therefore, the Company’s computation of EBITDAre may not be comparable to that of such other REITs. | ||
Funds From Operations ("FFO"): The Company calculates FFO in accordance with the current National Association of Real Estate Investment Trusts (“NAREIT”) definition. NAREIT currently defines FFO as net income/(loss) (calculated in accordance with GAAP), excluding depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, gains and losses from change in control, and impairment write-downs of certain real estate assets and investment in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity, along with appropriate adjustments to those reconciling items for joint ventures, if any. These adjustments can vary among owners of identical assets in similar conditions based on historical cost accounting and useful-life estimates. FFO is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of the Company’s operating performance. The Company believes that FFO is helpful to investors as a supplemental performance measure because it excludes the effects of depreciation, amortization and gains or losses from sales of real estate, all of which are based on historical costs, which implicitly assumes that the value of real estate diminishes predictably over time. The Company also believes that FFO can help facilitate comparisons of operating performance between periods and with other REITs. However, other REITs may not define FFO in accordance with the NAREIT definition, or may interpret the current NAREIT definition differently than the Company; therefore, the Company’s computation of FFO may not be comparable to that of such other REITs. | ||
Incremental Capital Expenditures: Incremental Capital Expenditures are defined as capital expenditures of a non-recurring nature that incrementally enhance the underlying assets' income generating capacity. Tenant improvements, leasing commissions, building capital and deferred lease incentives ("Leasing Costs") incurred to lease space that was vacant at acquisition, Leasing Costs for spaces vacant for greater than one year, Leasing Costs for spaces at newly acquired properties for which in-place leases expire shortly after acquisition, improvements associated with the expansion of a building, renovations that change the underlying classification of a building, and deferred building maintenance capital identified at and completed shortly after acquisition are included in this measure. | ||
Non-Incremental Capital Expenditures: Non-Incremental Capital Expenditures are defined as capital expenditures of a recurring nature related to tenant improvements and leasing commissions that do not incrementally enhance the underlying assets' income generating capacity. We exclude first generation tenant improvements and leasing commissions from this measure, in addition to other capital expenditures that qualify as Incremental Capital Expenditures, as defined above. | ||
Property Net Operating Income ("Property NOI"): The Company calculates Property NOI by starting with Core EBITDA and adjusting for general and administrative expense, income associated with property management performed by Piedmont for other organizations and other income or expense items for the Company, such as interest income from loan investments or costs from the pursuit of non-consummated transactions. The Company may present this measure on an accrual basis or a cash basis. When presented on a cash basis, the effects of non-cash general reserve for uncollectible accounts, straight lined rents and fair value lease revenue are also eliminated. Property NOI is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of the Company’s operating performance. The Company believes that Property NOI is helpful to investors as a supplemental comparative performance measure of income generated by its properties alone without the administrative overhead of the Company. Other REITs may not define Property NOI in the same manner as the Company; therefore, the Company’s computation of Property NOI may not be comparable to that of other REITs. | ||
Same Store Net Operating Income ("Same Store NOI"): The Company calculates Same Store NOI as Property NOI attributable to the properties for which the following criteria were met during the entire span of the current and prior year reporting periods: (i) they were owned, (ii) they were not under development / redevelopment, and (iii) none of the operating expenses for which were capitalized. Same Store NOI also excludes amounts attributable to land assets. The Company may present this measure on an accrual basis or a cash basis. Same Store NOI is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of the Company’s operating performance. The Company believes that Same Store NOI is helpful to investors as a supplemental comparative performance measure of the income generated from the same group of properties from one period to the next. Other REITs may not define Same Store NOI in the same manner as the Company; therefore, the Company’s computation of Same Store NOI may not be comparable to that of other REITs. | ||
Same Store Properties: Same Store Properties is defined as those properties for which the following criteria were met during the entire span of the current and prior year reporting periods: (i) they were owned, (ii) they were not under development / redevelopment, and (iii) none of the operating expenses for which were capitalized. Same Store Properties excludes land assets. | ||
Total Gross Assets: Total Gross Assets is defined as total assets with the add-back of accumulated depreciation and accumulated amortization related to real estate assets and accumulated amortization related to deferred lease costs. | ||
Total Gross Real Estate Assets: Total Gross Real Estate Assets is defined as total real estate assets with the add-back of accumulated depreciation and accumulated amortization related to real estate assets. |
Dylan Burzinski | Anthony Paolone, CFA | Nicholas Thillman | Michael Lewis, CFA | ||||||||
Green Street Advisors | JP Morgan | Robert W. Baird & Co. | Truist Securities | ||||||||
100 Bayview Circle, Suite 400 | 383 Madison Avenue | 777 East Wisconsin Avenue | 711 Fifth Avenue, 4th Floor | ||||||||
Newport Beach, CA 92660 | 32nd Floor | Milwaukee, WI 53202 | New York, NY 10022 | ||||||||
Phone: (949) 640-8780 | New York, NY 10179 | Phone: (414) 298-5053 | Phone: (212) 319-5659 | ||||||||
Phone: (212) 622-6682 | |||||||||||
Mark S. Streeter, CFA | ||||||||
JP Morgan | ||||||||
383 Madison Avenue | ||||||||
3rd Floor | ||||||||
New York, NY 10179 | ||||||||
Phone: (212) 834-5086 | ||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||
9/30/2023 | 6/30/2023 | 3/31/2023 | 12/31/2022 | 9/30/2022 | 9/30/2023 | 9/30/2022 | |||||||||||||||||||||||||||||||||||
GAAP net income / (loss) applicable to common stock | $ | (17,002) | $ | (1,988) | $ | (1,367) | $ | 75,569 | $ | 3,331 | $ | (20,357) | $ | 71,261 | |||||||||||||||||||||||||||
Depreciation | 37,790 | 36,200 | 35,690 | 34,587 | 34,743 | 109,680 | 98,262 | ||||||||||||||||||||||||||||||||||
Amortization | 20,151 | 21,323 | 22,021 | 23,905 | 23,278 | 63,495 | 66,986 | ||||||||||||||||||||||||||||||||||
Impairment charge | 10,957 | — | — | 25,981 | — | 10,957 | — | ||||||||||||||||||||||||||||||||||
Loss / (gain) on sale of properties | — | — | — | (101,055) | — | — | (50,674) | ||||||||||||||||||||||||||||||||||
NAREIT funds from operations applicable to common stock | 51,896 | 55,535 | 56,344 | 58,987 | 61,352 | 163,775 | 185,835 | ||||||||||||||||||||||||||||||||||
Adjustments: | |||||||||||||||||||||||||||||||||||||||||
Severance costs associated with fourth quarter 2022 management reorganization | — | — | — | 2,248 | — | — | — | ||||||||||||||||||||||||||||||||||
Loss / (gain) on early extinguishment of debt | 820 | — | — | — | — | 820 | — | ||||||||||||||||||||||||||||||||||
Core funds from operations applicable to common stock | 52,716 | 55,535 | 56,344 | 61,235 | 61,352 | 164,595 | 185,835 | ||||||||||||||||||||||||||||||||||
Adjustments: | |||||||||||||||||||||||||||||||||||||||||
Amortization of debt issuance costs and discounts on debt | 1,410 | 1,312 | 1,239 | 926 | 922 | 3,961 | 2,463 | ||||||||||||||||||||||||||||||||||
Depreciation of non real estate assets | 350 | 264 | 97 | 191 | 189 | 711 | 537 | ||||||||||||||||||||||||||||||||||
Straight-line effects of lease revenue | (418) | (2,755) | (3,187) | (2,356) | (3,268) | (6,360) | (8,874) | ||||||||||||||||||||||||||||||||||
Stock-based compensation adjustments | 2,070 | 2,095 | 183 | 1,717 | 1,950 | 4,348 | 3,116 | ||||||||||||||||||||||||||||||||||
Amortization of lease-related intangibles | (4,479) | (3,119) | (3,412) | (3,713) | (3,542) | (11,010) | (9,713) | ||||||||||||||||||||||||||||||||||
Non-incremental capital expenditures | |||||||||||||||||||||||||||||||||||||||||
Building/Construction/Development | (7,085) | (2,914) | (4,752) | (3,967) | (6,897) | (14,751) | (15,151) | ||||||||||||||||||||||||||||||||||
Tenant Improvements | (2,687) | (2,228) | (5,699) | (2,934) | (3,146) | (10,614) | (18,054) | ||||||||||||||||||||||||||||||||||
Leasing Costs | (1,938) | (3,746) | (4,021) | (4,017) | (4,078) | (9,705) | (9,201) | ||||||||||||||||||||||||||||||||||
Adjusted funds from operations applicable to common stock | $ | 39,939 | $ | 44,444 | $ | 36,792 | $ | 47,082 | $ | 43,482 | $ | 121,175 | $ | 130,958 |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||
9/30/2023 | 6/30/2023 | 3/31/2023 | 12/31/2022 | 9/30/2022 | 9/30/2023 | 9/30/2022 | |||||||||||||||||||||||||||||||||||
Net income / (loss) applicable to Piedmont | $ | (17,002) | $ | (1,988) | $ | (1,367) | $ | 75,569 | $ | 3,331 | $ | (20,357) | $ | 71,261 | |||||||||||||||||||||||||||
Net income / (loss) applicable to noncontrolling interest | 1 | 3 | 3 | 1 | — | 7 | (1) | ||||||||||||||||||||||||||||||||||
Interest expense | 27,361 | 23,389 | 22,077 | 20,739 | 17,244 | 72,827 | 44,917 | ||||||||||||||||||||||||||||||||||
Depreciation | 38,140 | 36,464 | 35,787 | 34,778 | 34,931 | 110,391 | 98,799 | ||||||||||||||||||||||||||||||||||
Amortization | 20,151 | 21,323 | 22,021 | 23,905 | 23,278 | 63,495 | 66,986 | ||||||||||||||||||||||||||||||||||
Depreciation and amortization attributable to noncontrolling interests | 20 | 21 | 20 | 20 | 21 | 60 | 65 | ||||||||||||||||||||||||||||||||||
Impairment charge | 10,957 | — | — | 25,981 | — | 10,957 | — | ||||||||||||||||||||||||||||||||||
(Gain) / loss on sale of properties | — | — | — | (101,055) | — | — | (50,674) | ||||||||||||||||||||||||||||||||||
EBITDAre | 79,628 | 79,212 | 78,541 | 79,938 | 78,805 | 237,380 | 231,353 | ||||||||||||||||||||||||||||||||||
Severance costs associated with fourth quarter 2022 management reorganization | — | — | — | 2,248 | — | — | — | ||||||||||||||||||||||||||||||||||
(Gain) / loss on early extinguishment of debt | 820 | — | — | — | — | 820 | — | ||||||||||||||||||||||||||||||||||
Core EBITDA | 80,448 | 79,212 | 78,541 | 82,186 | 78,805 | 238,200 | 231,353 | ||||||||||||||||||||||||||||||||||
General & administrative expenses | 7,043 | 7,279 | 7,691 | 5,668 | 6,590 | 22,013 | 21,212 | ||||||||||||||||||||||||||||||||||
Non-cash general reserve for uncollectible accounts | (600) | — | (400) | (1,000) | (1,000) | (1,000) | (2,000) | ||||||||||||||||||||||||||||||||||
Management fee revenue | (210) | (254) | (293) | (261) | (177) | (756) | (743) | ||||||||||||||||||||||||||||||||||
Other (income) / expense | (207) | (1,571) | (1,440) | (193) | (119) | (3,218) | (1,655) | ||||||||||||||||||||||||||||||||||
Straight-line effects of lease revenue | (418) | (2,755) | (3,187) | (2,356) | (3,268) | (6,360) | (8,874) | ||||||||||||||||||||||||||||||||||
Straight-line effects of lease revenue attributable to noncontrolling interests | (2) | (1) | (4) | (4) | (4) | (7) | (6) | ||||||||||||||||||||||||||||||||||
Amortization of lease-related intangibles | (4,479) | (3,119) | (3,412) | (3,713) | (3,542) | (11,010) | (9,713) | ||||||||||||||||||||||||||||||||||
Property net operating income (cash basis) | 81,575 | 78,791 | 77,496 | 80,327 | 77,285 | 237,862 | 229,574 | ||||||||||||||||||||||||||||||||||
Deduct net operating (income) / loss from: | |||||||||||||||||||||||||||||||||||||||||
Acquisitions | (5,941) | (5,770) | (5,073) | (5,313) | (2,867) | (16,784) | (2,867) | ||||||||||||||||||||||||||||||||||
Dispositions | 28 | 48 | 25 | (2,343) | (2,587) | 102 | (8,372) | ||||||||||||||||||||||||||||||||||
Other investments | 212 | 173 | 164 | 224 | 211 | 548 | 539 | ||||||||||||||||||||||||||||||||||
Same store net operating income (cash basis) | $ | 75,874 | $ | 73,242 | $ | 72,612 | $ | 72,895 | $ | 72,042 | $ | 221,728 | $ | 218,874 |
Project Name | Energy Star Certification | LEED Certification | BOMA 360 Certification | Percent Ownership | Number of Buildings | Rentable Square Footage Owned | Percent Leased | Commenced Leased Percentage | Economic Leased Percentage (2) | Annualized Lease Revenues | ||||||||||||||||||||||
Atlanta | ||||||||||||||||||||||||||||||||
999 Peachtree Street | P | P | P | 100.0% | 1 | 625 | 85.9 | % | 84.2 | % | 77.9 | % | 21,310 | |||||||||||||||||||
1180 Peachtree Street | P | P | P | 100.0% | 1 | 691 | 95.5 | % | 93.2 | % | 93.2 | % | 33,345 | |||||||||||||||||||
Galleria | P | P | P | 100.0% | 5 | 2,159 | 86.4 | % | 78.6 | % | 69.8 | % | 62,131 | |||||||||||||||||||
Glenridge Highlands | P | P | P | 100.0% | 2 | 714 | 87.1 | % | 86.6 | % | 83.6 | % | 23,072 | |||||||||||||||||||
1155 Perimeter Center West | P | P | P | 100.0% | 1 | 377 | 91.8 | % | 88.1 | % | 84.6 | % | 14,007 | |||||||||||||||||||
The Medici | P | P | 100.0% | 1 | 156 | 92.3 | % | 92.3 | % | 84.6 | % | 5,645 | ||||||||||||||||||||
Metropolitan Area Subtotal / Weighted Average | 11 | 4,722 | 88.4 | % | 83.9 | % | 78.1 | % | 159,510 | |||||||||||||||||||||||
Boston | ||||||||||||||||||||||||||||||||
5 Wall Street | P | P | P | 100.0% | 1 | 182 | 100.0 | % | 100.0 | % | 100.0 | % | 7,468 | |||||||||||||||||||
Wayside Office Park | P | P | 100.0% | 2 | 473 | 96.8 | % | 89.9 | % | 89.9 | % | 18,035 | ||||||||||||||||||||
25 Burlington Mall Road | P | P | 100.0% | 1 | 291 | 53.3 | % | 51.5 | % | 49.8 | % | 6,674 | ||||||||||||||||||||
80 & 90 Central Street | P | P | 100.0% | 2 | 324 | 87.0 | % | 79.0 | % | 71.0 | % | 6,883 | ||||||||||||||||||||
Metropolitan Area Subtotal / Weighted Average | 6 | 1,270 | 84.8 | % | 79.8 | % | 77.3 | % | 39,060 | |||||||||||||||||||||||
Dallas | ||||||||||||||||||||||||||||||||
Galleria Office Towers | P | P | P | 100.0% | 3 | 1,433 | 92.2 | % | 87.6 | % | 87.3 | % | 57,431 | |||||||||||||||||||
One Lincoln Park | P | P | P | 100.0% | 1 | 257 | 58.0 | % | 56.8 | % | 56.4 | % | 6,406 | |||||||||||||||||||
Park Place on Turtle Creek | P | P | 100.0% | 1 | 177 | 80.8 | % | 78.0 | % | 74.6 | % | 7,166 | ||||||||||||||||||||
6565 North MacArthur Boulevard | P | P | P | 100.0% | 1 | 255 | 81.2 | % | 79.6 | % | 78.4 | % | 6,584 | |||||||||||||||||||
750 West John Carpenter Freeway | P | P | P | 100.0% | 1 | 315 | 46.3 | % | 46.3 | % | 46.3 | % | 4,714 | |||||||||||||||||||
6011, 6021 & 6031 Connection Drive | P | P | 100.0% | 3 | 605 | 91.9 | % | 91.9 | % | 89.3 | % | 19,314 | ||||||||||||||||||||
Las Colinas Corporate Center | P | P | 100.0% | 3 | 485 | 74.2 | % | 55.9 | % | 51.5 | % | 12,154 | ||||||||||||||||||||
Metropolitan Area Subtotal / Weighted Average | 13 | 3,527 | 81.7 | % | 77.0 | % | 75.5 | % | 113,769 | |||||||||||||||||||||||
Minneapolis | ||||||||||||||||||||||||||||||||
US Bancorp Center | P | P | P | 100.0% | 1 | 937 | 90.1 | % | 89.0 | % | 89.0 | % | 33,602 | |||||||||||||||||||
One & Two Meridian Crossings | P | P | P | 100.0% | 2 | 384 | 93.2 | % | 93.2 | % | 93.2 | % | 12,132 | |||||||||||||||||||
Crescent Ridge II | P | P | P | 100.0% | 1 | 301 | 85.7 | % | 83.4 | % | 80.1 | % | 9,093 | |||||||||||||||||||
Norman Pointe I | P | P | 100.0% | 1 | 214 | 85.0 | % | 85.0 | % | 84.1 | % | 6,179 | ||||||||||||||||||||
9320 Excelsior Boulevard | 100.0% | 1 | 268 | 100.0 | % | 100.0 | % | 100.0 | % | 5,625 | ||||||||||||||||||||||
Metropolitan Area Subtotal / Weighted Average | 6 | 2,104 | 90.8 | % | 90.0 | % | 89.4 | % | 66,631 | |||||||||||||||||||||||
New York | ||||||||||||||||||||||||||||||||
60 Broad Street | P | 100.0% | 1 | 1,045 | 87.3 | % | 86.4 | % | 86.4 | % | 48,581 | |||||||||||||||||||||
Metropolitan Area Subtotal / Weighted Average | 1 | 1,045 | 87.3 | % | 86.4 | % | 86.4 | % | 48,581 | |||||||||||||||||||||||
Project Name | Energy Star Certification | LEED Certification | BOMA 360 Certification | Percent Ownership | Number of Buildings | Rentable Square Footage Owned | Percent Leased | Commenced Leased Percentage | Economic Leased Percentage (2) | Annualized Lease Revenues | ||||||||||||||||||||||
Orlando | ||||||||||||||||||||||||||||||||
200 South Orange Avenue | P | P | P | 100.0% | 1 | 653 | 91.1 | % | 82.7 | % | 79.9 | % | 22,540 | |||||||||||||||||||
CNL Center I & II | P | P | 99.0% | 2 | 620 | 93.2 | % | 93.2 | % | 89.4 | % | 23,711 | ||||||||||||||||||||
501 West Church Street | 100.0% | 1 | 182 | 100.0 | % | 100.0 | % | 100.0 | % | 1,741 | ||||||||||||||||||||||
400 & 500 TownPark Commons | P | P | P | 100.0% | 2 | 309 | 100.0 | % | 99.4 | % | 99.4 | % | 10,474 | |||||||||||||||||||
Metropolitan Area Subtotal / Weighted Average | 6 | 1,764 | 94.3 | % | 91.1 | % | 88.7 | % | 58,466 | |||||||||||||||||||||||
Washington, D.C. | ||||||||||||||||||||||||||||||||
4250 North Fairfax Drive | P | P | P | 100.0% | 1 | 308 | 87.3 | % | 86.0 | % | 86.0 | % | 14,115 | |||||||||||||||||||
Arlington Gateway | P | P | P | 100.0% | 1 | 329 | 79.3 | % | 75.4 | % | 69.6 | % | 13,229 | |||||||||||||||||||
3100 Clarendon Boulevard | P | P | P | 100.0% | 1 | 261 | 82.4 | % | 82.4 | % | 82.4 | % | 9,669 | |||||||||||||||||||
1201 & 1225 Eye Street | P | P | P | (3) | 2 | 482 | 70.3 | % | 70.3 | % | 68.9 | % | 21,051 | |||||||||||||||||||
400 Virginia Avenue | P | P | P | 100.0% | 1 | 209 | 74.6 | % | 74.6 | % | 74.2 | % | 7,966 | |||||||||||||||||||
Metropolitan Area Subtotal / Weighted Average | 6 | 1,589 | 78.0 | % | 77.0 | % | 75.3 | % | 66,030 | |||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||||||
Enclave Place | P | P | P | 100.0% | 1 | 301 | 100.0 | % | 100.0 | % | 100.0 | % | 11,547 | |||||||||||||||||||
1430 Enclave Parkway | P | P | P | 100.0% | 1 | 313 | 82.7 | % | 82.7 | % | 82.7 | % | 8,182 | |||||||||||||||||||
Metropolitan Area Subtotal / Weighted Average | 2 | 614 | 91.2 | % | 91.2 | % | 91.2 | % | 19,729 | |||||||||||||||||||||||
Grand Total | 51 | 16,635 | 86.7 | % | 83.4 | % | 80.8 | % | 571,776 | |||||||||||||||||||||||
(1) | This schedule includes information for Piedmont's in-service portfolio of properties only. Information on investments excluded from this schedule can be found on page 32. | ||||
(2) | Economic leased percentage excludes the square footage associated with executed but not commenced leases for currently vacant spaces and the square footage associated with tenants receiving rental abatements (after proportional adjustments for tenants receiving only partial rental abatements). | ||||
(3) | Piedmont owns 98.6% of 1201 Eye Street and 98.1% of 1225 Eye Street; however, it is entitled to 100% of the cash flows for each asset pursuant to the terms of each property ownership entity's joint venture agreement. |
Tenant | Property | Market | Square Feet Leased | Space Status | Estimated Commencement Date | New / Expansion | ||||||||||||||
Javelin Energy Partners | Las Colinas Corporate Center I | Dallas | 82,878 | Vacant | 70,053 SF Q1 2024 12,825 SF Q3 2024 | New | ||||||||||||||
OneDigital | Galleria 300 | Atlanta | 70,445 | 23,506 SF Vacant | 23,506 SF Q1 2024 46,939 SF Q3 2025 | New | ||||||||||||||
Kimley-Horn and Associates | 200 and 222 South Orange Avenue | Orlando | 61,348 | Vacant | Q4 2023 | New | ||||||||||||||
Undisclosed Tenant | One Galleria Tower | Dallas | 58,297 | Vacant | Q4 2023 | New | ||||||||||||||
FirstKey Homes | Galleria 600 | Atlanta | 51,442 | Vacant | Q3 2024 | New |
Tenant | Property | Market | Abated Square Feet | Lease Commencement Date | Remaining Abatement Schedule | Lease Expiration | ||||||||||||||
Brand Industrial Services | Galleria 600 | Atlanta | 50,380 | Q1 2023 | Early February 2023 through Early February 2024; March 2025 | Q3 2034 | ||||||||||||||
Kimley-Horn and Associates | 200 and 222 South Orange Avenue | Orlando | 61,348 | Q4 2023 | November 2023 through October 2024 | Q4 2034 | ||||||||||||||
Institute for Justice | Arlington Gateway | Washington, DC | 58,285 | Q1 2024 | January 2024 through June 2025 | Q2 2037 | ||||||||||||||
Undisclosed Tenant | One Galleria Tower | Dallas | 50,130 | Q4 2023 | January 2024 through June 2025 | Q2 2035 | ||||||||||||||
Javelin Energy Partners | Las Colinas Corporate Center I | Dallas | 82,878 | 70,053 SF Q1 2024 12,825 SF Q3 2024 | March 2024 through August 2024 (70,053 SF); September 2024 through February 2025 (82,878 SF); March 2025 through August 2025 (12,825 SF) | Q1 2035 | ||||||||||||||
OneDigital | Galleria 300 | Atlanta | 70,445 | Q1 2024 | March 2024 through February 2025 (23,506 SF); September 2025 through August 2026 (46,939 SF) | Q4 2036 | ||||||||||||||
FirstKey Homes | Galleria 600 | Atlanta | 51,442 | Q3 2024 | September 2024 through August 2026 (50% abatement of monthly gross rent) | Q3 2035 |
)WM];\&?$;1['77W>$H?[)EEN]:M[A%1W2"">WN%RJD%RN24
MW'Q__@T4_:E_:4\)_LN>(?A1XI_9 \=>*_%&D>#-!\"6_BBU$
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MF-&E82-C-?M1#&(84A#LVQ0-SMDG' (M%CMD\+^+[>.\&F_VS Z"
M5;!U$
M<,4DQ'_3&@#[1L?^#E'_ (*H^)/@Y>_\% ?"'_!'R*Z_9HL+^19?$+^*7&HM
M:1S>3)'9-/EO=DTLD,EE9Z?/(CW-O+')YGF ^6
M%D;>ZE6 _9K_ (-\?@O\#_@K_P $P_!]C^S;XW\;Z_X'\0:GJ&M^';_X@Z!'
MIFHF&>
31?9]/_ +&T>'RDF5_-5MA(\P/YF?FW;N:Y?]K7P?\
M"C]IWPWX0_X(6_\ !//P/;OH'PZUWPW)\3O&MB6ET[X9:5I-Y!=QVJW;%C-K
M=P;81K$&:4"2>29ERS5]7_!_]AVZ^!7@+X]>&OAM\;=3T_6/C;\0=?\ &%OX
MCCTV/SO#-_J5C;6JF!-V)O(:V252Q&YC@@"OG?\ 9=_X(Z_MM?L<_#G3?@Y\
M ?\ @L;XET/PKI]])=R:5'\"O"LLEY++)YD\MQ
(_!=_H5K*HO%GA3X3_
M '@GDBUGQ-!#+%!J%Q++%$EI;1&>65((P[NSGS9#@4 >S_L%_\ !-SQ?^R;
M\+=1^"WQ^_:[\1_'GPK%:V.F^#O#OC[PUIZV?A[3+,2+;0HJHS7$P1U1YY'^
M811@(FT5]16-C9:991:;IMG%;V]O&L<$$$81(T48"JHX X '2I:* "BBB@
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M@ HHHH **** "BBB@ HHHH **** "BBB@ HHHH **** "BBB@ HHHH ****
M"BBB@ HHHH **** "BBB@ HHHH **** "BBB@ HHHH **** "BBB@ HHHH *
M*** "BBB@ HHHH **** "BBB@ HHHH **** "BBB@ HHHH **** "BBB@ HH
MHH **** "BBB@ HHHH **** "BBB@ HHHH **** "BBB@ HHHH **** "BBB
M@ HHHH **** "BBB@ HHHH **** ([NTM-0M);"_M8YX)XVCFAF0,DB$8*L#
MP002"#UKS?\ 9'_9&^"/[#_P5M?V>_V=]"O=+\*6&IWU[I^F7>JS72VC75S)
M<211&5F\J(/(VV-<*HYP6+,?3** "BBB@ HHHH **** "BBB@ HHHH ****
M"BBB@ HHHH **** "BBB@ HHHH **** "BBB@ HHKX0_8P_X+G?#?]H_]KCQ
MC^Q_\@MJ?PGURQ\?:QX8^'6HZYJ:7%EXMNM+F$%[:).J(D%^C[9/LA+%HI
MX65FW#< ?=&G:IIFKP-=:3J,%U$D\D+R6\RNJR1NT)Y[?47$$\<
)WM];\&?$;1['77W>$H?[)EEN]:M[A%1W2"">WN%RJD%RN24
MW'Q__@T4_:E_:4\)_LN>(?A1XI_9!U$
M<,4DQ'_3&@#[1L?^#E'_ (*H^)/@Y>_\% ?"'_!'R*Z_9HL+^19?$+^*7&HM
M:1S>3)'9-/EO=DTLD,EE9Z?/(CW-O+')YGF ^6
M%D;>ZE6 _9K_ (-\?@O\#_@K_P $P_!]C^S;XW\;Z_X'\0:GJ&M^';_X@Z!'
MIFHF&>
>;33[Z7'EVMU>K&;6UG8D 12RH^2!B@
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M_P"31_'O_8!?_P!#6ND^,VB?'+6],LHO@=XWT70[M)V-]+K6F-
Z\2^(KH^;J&I3R-\TC23%MN[)6-8TSA!4G[6W['NA_M;:]\)=
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MW\>>*_VFKO\ ;"_9+_:QU?X.^.]?\,6_A_QM)#X6L]\.^.K.[L+;7KV^TB+2_#=DZRL!%!"GV:VB
MSOF,
'JOS/Z4:***#_1L*^ /^#GW_E"U\5/^PCX>_\ 3Y8U]_U\ ?\ !S[_ ,H6
MOBI_V$?#W_I\L:^IX'_Y+/+?^O\ 2_\ 2XF&)_W>?H_R/Y1J***_T'/E@HHH
MH *T?!W_ "-VE?\ 82@_]&+6=6CX._Y&[2O^PE!_Z,6IJ? _0%N?UU_\%P/^
M3!]6_P"QBTW_ -'5^*=?M9_P7 _Y,'U;_L8M-_\ 1U?BG7^:)_.?CE_R6^
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M&>M?&7PKX(^,&L:CXLOKW_A.[+7-UI>W&HQSS.D]PMR\=U%)@&-D*KA< 'Z
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M$)2V33_$3V/XU:*_6?\ XA4/C9_T4_QW_P"&DMO_ )=4?\0J'QL_Z*?X[_\
M#26W_P NJ_M[_B,/AS_T'?\ E*M_\K/G/J&+_E_%?YGY,45^L_\ Q"H?&S_H
MI_CO_P -);?_ "ZH_P"(5#XV?]%/\=_^&DMO_EU1_P 1A\.?^@[_ ,I5O_E8
M?4,7_+^*_P S\F**_6?_ (A4/C9_T4_QW_X:2V_^75'_ !"H?&S_ **?X[_\
M-);?_+JC_B,/AS_T'?\ E*M_\K#ZAB_Y?Q7^9^K_ /P2Q_Y5[? __9$]6_\
M0+ROR)K]8?V2]0^(_P"SQ^Q?8_\ !,RU^ OC#7M4\+?#R;2+K74M;>WF,5UY
MRK