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Derivative Instruments
 12 Months Ended
Dec. 31, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments Derivative Instruments
Risk Management Objective of Using Derivatives

In addition to operational risks which arise in the normal course of business, Piedmont is exposed to economic risks such as interest rate, liquidity, and credit risk. In certain situations, Piedmont has entered into derivative financial instruments, specifically interest rate swap agreements, to manage interest rate risk exposure arising from current or future variable rate debt transactions. Interest rate swap agreements involve the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. Piedmont’s objective in using interest rate derivatives is to add stability to interest expense and to manage its exposure to interest rate movements.

Cash Flow Hedges of Interest Rate Risk

Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for Piedmont making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

As of December 31, 2023, Piedmont was party to a total of eight interest rate swap agreements which are designated as effective cash flow hedges and fully hedge the variable cash flows covering the entire outstanding balance of the $250 Million Unsecured 2018 Term Loan through the maturity of the loan in March 2025. The maximum length of time over which Piedmont is hedging its exposure to the variability in future cash flows related to these interest rate swap agreements is 15 months.

During the year ended December 31, 2021, Piedmont entered into, and subsequently settled, one forward starting interest rate swap agreement with a notional value of $50 million to hedge the risk of changes in the interest-related cash flows associated with the issuance of the $300 Million Unsecured Senior Notes due 2032 (see Note 3). The settlement resulted in a gain of approximately $0.6 million, which was recorded as accumulated OCI and is being amortized as an offset to interest expense over the following ten years.
A detail of Piedmont’s interest rate derivatives outstanding as of December 31, 2023 is as follows:

Interest Rate Derivatives:Number of Swap AgreementsAssociated Debt InstrumentNotional Amount
(in millions)		Effective DateMaturity Date
Interest rate swaps2
$250 Million Unsecured 2018 Term Loan
$100 3/29/20183/31/2025
Interest rate swaps3
$250 Million Unsecured 2018 Term Loan
75 12/2/20223/31/2025
Interest rate swaps3
$250 Million Unsecured 2018 Term Loan
$75 12/12/20223/31/2025
    Total$250 

Piedmont presents its interest rate derivatives on its consolidated balance sheets on a gross basis as interest rate swap assets and interest rate swap liabilities. A detail of Piedmont’s interest rate derivatives on a gross and net basis as of December 31, 2023 and 2022, respectively, is as follows (in thousands):

Interest rate swaps classified as:December 31, 2023December 31, 2022
Gross derivative assets$3,032 $4,183 
Gross derivative liabilities— — 
Net derivative assets$3,032 $4,183 

The gain/(loss) on Piedmont's interest rate derivatives, including previously settled forward starting interest rate swaps, that was recorded in OCI and the accompanying consolidated statements of operations as a component of interest expense for the years ended December 31, 2023, 2022, and 2021, respectively, was as follows (in thousands):

Interest Rate Swaps in Cash Flow Hedging Relationships:202320222021
Amount of gain recognized in OCI$2,626 $8,202 $2,994 
Amount of previously recorded gain/(loss) reclassified from OCI into Interest Expense
$3,365 $(1,273)$(2,952)
Total amount of Interest Expense presented in the consolidated statements of operations
$(101,258)$(65,656)$(51,292)
Total amount of Loss on Early Extinguishment of Debt presented in the consolidated statements of operations
$(820)$— $— 

Piedmont estimates that approximately $1.3 million will be reclassified from OCI as a decrease in interest expense over the next twelve months. Piedmont did not recognize any hedge ineffectiveness on its cash flow hedges during the three years ended December 31, 2023.

See Note 5 for fair value disclosures of Piedmont's derivative instruments.

Credit-risk-related Contingent Features

Piedmont has agreements with its derivative counterparties that contain a provision whereby if Piedmont defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then Piedmont could also be declared in default on its derivative obligations. If Piedmont were to breach any of the contractual provisions of the derivative contracts, it could be required to settle its liability obligations under the agreements at their termination value of the estimated fair values plus accrued interest. However, as of December 31, 2023, all of Piedmont's interest rate swap agreements are in an asset position. Additionally, Piedmont has rights of set-off under certain of its derivative agreements related to potential termination fees and amounts payable under the agreements, if a termination were to occur.