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What changed in Piedmont Realty Trust, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Piedmont Realty Trust, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+143 added−147 removedSource: 10-K (2025-02-19) vs 10-K (2024-02-20)

Top changes in Piedmont Realty Trust, Inc.'s 2024 10-K

143 paragraphs added · 147 removed · 112 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeDuring 2023, we were again named an Energy Star Partner of the Year for the third year in a row, as well as being selected as a 2022 Green Lease Leader by the Institute for Market Transformation and the U.S. Department of Energy's Better Buildings Alliance.
Biggest changeDuring 2024, we: • were recognized as an ENERGY STAR® Partner of the Year for the fourth consecutive year, this year adding the prestigious “Sustained Excellence” designation; • achieved a maximum 5 star designation and “Green Star” recognition with scores ranking in the top decile of all participating listed U.S. companies from GRESB Real Estate Assessment; and • were selected as a 2023 Green Lease Leader by the Institute for Market Transformation and the U.S.
We manage portfolio risk by: • owning Class A office properties which are among the most desirable in their respective office sub-markets; • focusing our portfolio primarily in high growth Sunbelt markets; • ensuring that our tenants are credit-worthy and represent a broad spectrum of industry types with lease expirations that are laddered over many years; • maintaining a low leverage structure, utilizing primarily unsecured financing facilities with laddered maturities; • structuring lease expirations to avoid having multiple leases expire in the same market in a relatively short period of time; • using our experience to meet the specialized requirements of federal, state and local government agency tenants; and • utilizing our purchasing power and market knowledge to reduce property operating costs.
We manage portfolio risk by: • owning Class A office properties which are among the most desirable in their respective office sub-markets; • focusing our portfolio primarily in high growth Sunbelt markets; • ensuring that our tenants are credit-worthy and represent a broad spectrum of industry types with lease expirations that are laddered over many years; • targeting a low leverage structure comprised of primarily unsecured financing facilities with laddered maturities; • structuring lease expirations to avoid having multiple leases expire in the same market in a relatively short period of time; • using our experience to meet the specialized requirements of federal, state and local government agency tenants; and • utilizing our purchasing power and market knowledge to reduce property operating costs.
Financing Strategy We employ a conservative leverage strategy by targeting a debt-to-gross assets ratio of between 30% to 40%, and debt to EBITDA ratio of mid 6x or below.
Financing Strategy We employ a conservative leverage strategy by targeting a debt-to-gross assets ratio of between 30% to 40%, and net debt to EBITDA ratio of mid 6x or below.
Our focus on operational excellence, fostering long-term relationships with our high-credit quality, diverse tenant base, and maintaining our portfolio of modern, amenity-rich properties, has resulted in an approximate 68% tenant retention rate over the past five years. In addition to operational excellence, we also focus on environmental sustainability initiatives at our properties.
Our focus on operational excellence, fostering long-term relationships with our high-credit quality, diverse tenant base, and maintaining our portfolio of modern, amenity-rich properties, has resulted in an approximate 64% tenant retention rate over the past five years. In addition to operational excellence, we also focus on environmental sustainability initiatives at our properties.
Segment Information As of December 31, 2023, our reportable segments were determined geographically based on the markets in which we have significant investments. We consider geographic location when evaluating our portfolio composition and in assessing the ongoing operations and performance of our properties. See Note 14 , Segment Information, to the accompanying consolidated financial statements.
Segment Information As of December 31, 2024, our reportable segments were determined geographically based on the markets in which we have significant investments. We consider geographic location when evaluating our portfolio composition and in assessing the ongoing operations and performance of our properties. See Note 14 , Segment Information, to the accompanying consolidated financial statements.
Human Capital and Social Involvement As of December 31, 2023, we had 150 employees, with approximately one-third of our employees working in our corporate office located in Atlanta, Georgia. Our remaining employees work in local management offices located in each of the office markets we serve.
Human Capital and Social Involvement As of December 31, 2024, we had 150 employees, with approximately one-third of our employees working in our corporate office located in Atlanta, Georgia. Our remaining employees work in local management offices located in each of the office markets we serve.
In each market where we operate, we also face significant competition for attractive investment opportunities from a large number of other real estate investors, including investors with significant capital resources such as domestic and foreign corporations and financial institutions, other publicly traded and privately held REITs, private institutional investment funds, investment banking firms, life insurance companies and pension funds.
In each market where we operate, we also face significant competition for attractive investment opportunities from a large number of other real estate investors, including investors with significant capital resources such as domestic and foreign 7 Table of Contents Index to Financial Statements corporations and financial institutions, other publicly traded and privately held REITs, private institutional investment funds, investment banking firms, life insurance companies and pension funds.
Such strategies include: • maintaining local management offices in markets where we have a significant presence; • offering, or being located near, superior amenities that help our tenants attract and retain their employees; 5 Table of Contents Index to Financial Statements • maintaining our high quality properties in an environmentally-friendly manner; • renovating our buildings to maintain their modern appearance and superior operating condition; • building and cultivating our relationships with commercial real estate executives; • using creative leasing approaches such as early extensions, lease wrap-arounds and restructurings; and • utilizing a national buying platform for property management support services to ensure optimal pricing, as well as to consistently implement best practices and achieve sustainability standards.
Such strategies include: • maintaining local management offices in markets where we have a significant presence; • using a "hospitality-driven" service approach intended to enhance each client's workplace experience; • offering, or being located near, superior amenities that help our tenants attract and retain their employees; • renovating our buildings to maintain their modern appearance and superior operating condition; • maintaining our high quality properties in an environmentally-friendly manner; • building and cultivating our relationships with commercial real estate executives; • using creative leasing approaches such as early extensions, lease wrap-arounds and restructurings; and • utilizing a national buying platform for property management support services to ensure optimal pricing, as well as to consistently implement best practices and achieve sustainability standards.
We do not face, however, the same competitors in every market. This competition, 7 Table of Contents Index to Financial Statements along with market-specific vacancy rates and the condition of available, leasable square footage, affects the rental rates and concessions that we negotiate with our tenants.
We do not face, however, the same competitors in every market. This competition, along with market-specific vacancy rates and the condition of available, leasable square footage, affects the rental rates and concessions that we negotiate with our tenants.
These redevelopment projects have focused on creating additional, or enhancing existing, amenities for our tenants to increase tenant satisfaction, occupancy, and rental rates, thereby supporting our leasing efforts and improving returns on our invested capital.
These redevelopment projects have focused on creating 5 Table of Contents Index to Financial Statements additional, or enhancing existing, amenities for our tenants to increase tenant satisfaction, occupancy, and rental rates, thereby supporting our leasing efforts and improving returns on our invested capital.
Competition We compete for tenants for our high-quality assets by fostering strong tenant relationships and by providing quality customer service including: leasing, asset management, property management, and construction management services.
Competition We compete for tenants for our high-quality assets by fostering strong tenant relationships through a hospitality-driven approach to customer services including: leasing, asset management, property management, and construction management services.
As of December 31, 2023, our tenants come from broadly diversified industry sectors and no individual tenant represented more than 5% of our ALR. Other Matters We have contracts with various governmental agencies, exclusively in the form of operating leases in buildings we own. See Item 1A.
As of December 31, 2024, our tenants come from broadly diversified industry sectors and only one tenant, the State of New York at our 60 Broad Street project, represented more than 5% of our ALR. Other Matters We have contracts with various governmental agencies, exclusively in the form of operating leases in buildings we own. See Item 1A.
Our employees have partnered together to donate thousands of dollars and hours annually to numerous organizations. Further details concerning our workforce and social and community involvement initiatives can be found in our annual ESG report located on our website, www.piedmontreit.com under the "ESG" section. The information contained on our website is not incorporated herein by reference.
Further details concerning our workforce and social and community involvement initiatives can be found in our annual ESG report located on our website, www.piedmontreit.com under the "ESG" section. The information contained on our website is not incorporated herein by reference.
Approximately 70% of our portfolio (based on square footage) has achieved and maintains Leadership in Energy and Environmental Design ("LEED") certification.
Department of Energy’s Better Buildings Alliance. Approximately 72% of our portfolio (based on square footage) has achieved and maintains Leadership in Energy and Environmental Design ("LEED") certification and 61% of our portfolio is certified LEED Gold or higher.
We apply this policy to all of our employees, suppliers, and vendors, regardless of their geographic location. We are committed to hiring and supporting a diverse workforce that fosters skilled and motivated people working together to deliver results in support of our core business values.
We are committed to hiring and supporting a diverse workforce that fosters skilled and motivated people working together to deliver results in support of our core business values. We encourage all employees, tenants, and vendors to mutually respect one another's diversity in order to maintain a cohesive work environment that values fairness and equal treatment.
We lease space to a mixture of corporate tenants from multiple industries, and our average lease size is approximately 15,000 square feet with an average lease term remaining of approximately six years. Our diversified tenant base is primarily comprised of investment grade or nationally recognized corporations or governmental agencies, with the majority of our ALR derived from such tenants.
We lease space to a mixture of corporate tenants from multiple industries, and our average lease size is approximately 14,000 square feet with an average lease term remaining of six years as of December 31, 2024.
References to Piedmont herein shall include Piedmont and all of its subsidiaries, including Piedmont OP and its subsidiaries and joint ventures. Operating Objectives and Strategy As of December 31, 2023, we owned and operated 51 in-service office properties comprised of approximately 16.6 million square feet of primarily Class A office space which were 87.1% leased.
References to Piedmont herein shall include Piedmont and all of its subsidiaries, including Piedmont OP and its subsidiaries and joint ventures. Operating Objectives and Strategy As of December 31, 2024, we owned and operated a portfolio of 30 in-service projects and three redevelopment projects.
The scholarships provide renewable, need-based, scholastic support to selected students interested in pursuing a career related to the real estate industry. We recognize the value and benefit of employee volunteerism and fully appreciate its positive impact on the community, our employees, and ultimately, our company culture by promoting team building, collaboration, and unity.
We recognize the value and benefit of employee volunteerism and fully appreciate its positive impact on the community, our employees, and ultimately, our company culture by promoting team building, collaboration, and unity. Our employees have partnered together to donate thousands of dollars and hours annually to numerous organizations.
BOMA 360 is a program that evaluates a building's operations and management and benchmarks its performance against industry standards. As of December 31, 2023, properties representing approximately 97% of our portfolio (based on square footage) had achieved such a designation, recognizing excellence in building operations and management.
As of December 31, 2024, properties representing approximately 97% of our portfolio (based on square footage) had achieved such a designation, recognizing excellence in building operations and management and counting us among the top ten companies nationwide with the most BOMA360 certified buildings.
Training programs for our employees, managers, and contractors during 2023 included professional training on workplace harassment and cybersecurity. In addition, employees and managers received diversity, conflict management, collaboration, ethics, and safety training. We intend to provide an environment that is equitable, unbiased, pleasant, diverse, healthy, comfortable, and free from intimidation, hostilities, or other offenses that might interfere with work performance.
We intend to provide an environment that is equitable, unbiased, pleasant, diverse, healthy, comfortable, and free from intimidation, hostilities, or other offenses that might interfere with work performance. We apply this policy to all of our employees, suppliers, and vendors, regardless of their geographic location.
We encourage all employees, tenants, and vendors to mutually respect one another's diversity in order to maintain a cohesive work environment that values fairness and equal treatment. During 2023, we continued our partnership with two Historically Black Colleges and Universities, by providing funding for the Piedmont Office Realty Trust Scholarship Program.
During 2024, we continued our partnership with two Historically Black Colleges and Universities, by providing funding for the Piedmont Office Realty Trust Scholarship Program. The scholarships provide renewable, need-based, scholastic support to selected students interested in pursuing a career related to the real estate industry.
Additionally, we have one redevelopment asset comprising 127,000 square feet in Orlando, Florida. Collectively, approximately 70% of our ALR is generated from our properties located in our Sunbelt markets.
The in-service office projects total approximately 15.3 million square feet (unaudited) of primarily Class A office space and were 88.4% leased. Collectively, approximately 70% of our ALR is generated from our properties located in our Sunbelt markets.
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No tenant accounts for more than 5% of our ALR and only a total of three tenants, individually, account for 3% or more of our ALR.
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Our diversified tenant base is primarily comprised of investment grade or nationally recognized corporations or governmental agencies, with the majority of our ALR derived from such tenants. Only one tenant, the State of New York at our 60 Broad Street project, accounts for more than 5% of our ALR.
Added
BOMA 360 is a program that evaluates a building's operations and management and benchmarks its performance against industry standards.
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Training programs for our employees, managers, and contractors during 2024 included professional training on workplace harassment, artificial intelligence, and cybersecurity. In addition, employees and managers received performance management, conflict management, customer service, ethics, and safety training.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeArtificial Intelligence, Zoom, etc) becoming more prevalent, or other changes that reduce the demand for office workers or parking spaces generally; • increased demand for "co-working", open workspaces, or sharing of office space with other companies; • increased supply of office space due to the conversion of other asset classes such as shopping malls and other retail establishments to office space; • the attractiveness of our properties to potential tenants and competition from other available properties; • changes in interest rates and availability of permanent financing sources that may render the sale of a property difficult or unattractive or otherwise reduce returns to stockholders; • changes in market rental rates and related concessions granted to tenants, including free rent and tenant improvement allowances; • the financial stability of our tenants, including bankruptcies, financial difficulties, or lease defaults by our tenants; • the inability to finance property development or acquisitions on favorable terms; • changes in operating costs and expenses, including costs for maintenance, insurance, and real estate taxes, and our inability to timely adjust rents in light of such changes; • the need to periodically fund the costs to repair, renovate, and re-let space; • earthquakes, tornadoes, hurricanes and other natural disasters, civil unrest, terrorist acts or acts of war, any of which may result in uninsured or under-insured losses; • health crises such as the spread of communicable diseases and governmental or private measures taken to combat such health crises; • changes in, or increased costs of compliance with, governmental regulations, including those governing usage, zoning, the environment, and taxes; and • significant changes in accounting standards and tax laws.
Biggest changeThe following factors, among others, may adversely affect the operating performance and long- or short-term value of our properties: • changes in the national, regional, or local economic climate, particularly in markets in which we have a concentration of properties; • local office market conditions such as employment rates and changes in the supply of, or demand for, space in properties similar to those that we own within a particular area; • changes in the patterns of office or parking garage use due to work-from-home arrangements, remote work technology (e.g. artificial intelligence, virtual meeting platforms, etc.) becoming more prevalent, or other changes that reduce the demand for office workers or parking spaces generally; • increased demand for "co-working", open workspaces, or sharing of office space with other companies; • increased supply of office space due to the conversion of other asset classes such as shopping malls and other retail establishments to office space; • the attractiveness of our properties to potential tenants and competition from other available properties; • changes in interest rates and availability of permanent financing sources that may render the sale of a property difficult or unattractive or otherwise reduce returns to stockholders; • changes in market rental rates and related concessions granted to tenants, including free rent and tenant improvement allowances; • the financial stability of our tenants, including bankruptcies, financial difficulties, or lease defaults by our tenants; • the inability to finance property development or acquisitions on favorable terms; • changes in operating costs and expenses, including costs for maintenance, insurance, and real estate taxes, and our inability to timely adjust rents in light of such changes; • the need to periodically fund the costs to repair, renovate, and re-let space; • earthquakes, tornadoes, hurricanes, fires, and other natural disasters, civil unrest, terrorist acts or acts of war, any of which may result in uninsured or under-insured losses; • health crises such as the spread of communicable diseases and governmental or private measures taken to combat such health crises; • changes in, or increased costs of compliance with, governmental regulations, including those governing usage, zoning, the environment, and taxes; and • significant changes in accounting standards and tax laws.
Although we make efforts to maintain the security and integrity of these types of information technology networks and related systems, and despite various measures we have implemented to manage the risk of a security breach or disruption, there can be no assurance that our security efforts and measures will be effective or that 14 Table of Contents Index to Financial Statements attempted security breaches or disruptions would not be successful or damaging.
Although we make efforts to maintain the security and integrity of these types of information technology networks and related systems, and despite various measures we have implemented to manage the risk of 14 Table of Contents Index to Financial Statements a security breach or disruption, there can be no assurance that our security efforts and measures will be effective or that attempted security breaches or disruptions would not be successful or damaging.
Some of the factors that could negatively affect our stock price or result in fluctuations in the price or trading volume of our common stock include, but are not limited to, the following: • changes in the perceived demand for office space; • actual or anticipated variations in our quarterly operating results; • changes in our earnings estimates or publication of research reports about us or the real estate industry, although no assurance can be given that any research reports about us will be published or the accuracy of such reports; • changes in our dividend policy; • future sales of substantial amounts of our common stock by our existing or future stockholders; • increases in market interest rates, which may lead purchasers of our stock to demand a higher yield; • changes in market valuations of similar companies; • adverse market reaction to any increased indebtedness we incur in the future; • change in the credit ratings assigned to us, the Operating Partnership or our or their unsecured debt securities; • additions or departures of key personnel; • actions by institutional stockholders; • material, adverse litigation judgments; • speculation in the press or investment community; • general market and economic conditions; and • the realization of any of the other risk factors described in this report.
Some of the factors that could negatively affect our stock price or result in fluctuations in the price or trading volume of our common stock include, but are not limited to, the following: • changes in the perceived demand for office space; • actual or anticipated variations in our quarterly operating results; • changes in our earnings estimates or publication of research reports about us or the real estate industry, although no assurance can be given that any research reports about us will be published or the accuracy of such reports; • changes in our dividend policy; • future sales of substantial amounts of our common stock by our existing or future stockholders; • increases in market interest rates, which may lead purchasers of our stock to demand a higher yield; • changes in market valuations of similar companies; • adverse market reaction to any increased indebtedness we incur in the future; • change in the credit ratings assigned to us, the Operating Partnership or any of our unsecured debt securities; • additions or departures of key personnel; • actions by institutional stockholders; • material, adverse litigation judgments; • speculation in the press or investment community; • general market and economic conditions; and • the realization of any of the other risk factors described in this report.
If any of the credit rating agencies that have rated us, the Operating Partnership or our or their unsecured debt securities downgrades or lowers these credit ratings, or if any credit rating agency indicates that it has placed any such rating on a so-called “watch list” for possible downgrading or lowering or otherwise indicates that its outlook for that rating is negative, it could have a material adverse effect on our costs (including by increasing interest expense as a result of increases in the state interest rate spreads over reference rates or increased interest rate step-ups on certain of our or the Operating Partnership's debt instruments) and availability of capital, which could in turn have a material adverse effect on our financial condition, results of operations, cash flows and our ability to satisfy our debt service obligations.
If any of the credit rating agencies that have rated us, the Operating Partnership or any or our unsecured debt securities downgrades or lowers these credit ratings, or if any credit rating agency indicates that it has placed any such rating on a so-called “watch list” for possible downgrading or lowering or otherwise indicates that its outlook for that rating is negative, it could have a material adverse effect on our costs (including by increasing interest expense as a result of increases in the state interest rate spreads over reference rates or increased interest rate step-ups on certain of our or the Operating Partnership's debt instruments) and availability of capital, which could in turn have a material adverse effect on our financial condition, results of operations, cash flows and our ability to satisfy our debt service obligations.
Should market conditions lead to insolvency or make a merger necessary for one or more of our counterparties, or potential future counterparties, it is possible that the terms of our interest rate derivative contracts will not be honored in their current form with a replacement counterparty.
Should market conditions lead to default, insolvency or make a merger necessary for one or more of our counterparties, or potential future counterparties, it is possible that the terms of our interest rate derivative contracts will not be honored in their current form with a replacement counterparty.
When we engage in development activities, we are subject to risks associated with those activities that could adversely affect our financial condition, results of operations and cash flows, including: • uncertainties associated with zoning, land-use, building, occupancy and other governmental permits and authorizations, as well as, environmental concerns of governmental entities or community groups; • our builders’ ability to build in conformity with plans, specifications, budgeted costs and timetables; • delays in completing construction could give tenants the right to terminate pre-construction leases; • risks associated with making progress payments or other advances to builders before they complete construction; • unanticipated additional costs related to disputes with existing tenants during redevelopment projects; • normal lease-up risks relating to newly constructed projects; • projects with long lead times may increase leasing risk due to changes in market conditions; • development projects in which we have invested may be abandoned and the related investment will be impaired; • we may not be able to obtain land on which to develop; • we may not be able to obtain financing for development projects on favorable terms (if at all); • construction costs of a project may exceed the original estimates or construction may not be concluded on schedule, making the project less profitable than originally estimated or not profitable at all (including the possibility of errors or omissions in the project's design, contract default, contractor or subcontractor default, performance bond surety default, the effects of local weather conditions, the possibility of local or national strikes and the possibility of shortages in materials, building supplies or energy and fuel for equipment); • tenants which pre-lease space or contract with us for a build-to-suit project may default prior to occupying the project; • upon completion of construction, we may not be able to obtain, or obtain on advantageous terms, permanent financing for activities that we financed through construction loans; • we may not achieve sufficient occupancy levels and/or obtain sufficient rents to make a completed project profitable; and • substantial renovation and development activities may require a significant amount of management’s time and attention, diverting their attention from our other operations. 13 Table of Contents Index to Financial Statements Actual or threatened public health epidemics or outbreaks such as the COVID-19 pandemic, as well as governmental and private measures taken to combat such health crises, could have a material adverse effect on our business operations and financial results.
When we engage in development activities, we are subject to risks associated with those activities that could adversely affect our financial condition, results of operations and cash flows, including: • uncertainties associated with zoning, land-use, building, occupancy and other governmental permits and authorizations, as well as, environmental concerns of governmental entities or community groups; • our builders’ ability to build in conformity with plans, specifications, budgeted costs and timetables; • delays in completing construction could give tenants the right to terminate pre-construction leases; • risks associated with making progress payments or other advances to builders before they complete construction; • unanticipated additional costs related to disputes with existing tenants during redevelopment projects; • normal lease-up risks relating to newly constructed projects; • projects with long lead times may increase leasing risk due to changes in market conditions; • development projects in which we have invested may be abandoned and the related investment will be impaired; • we may not be able to obtain land on which to develop; • we may not be able to obtain financing for development projects on favorable terms (if at all); • construction costs of a project may exceed the original estimates or construction may not be concluded on schedule, making the project less profitable than originally estimated or not profitable at all (including the possibility of errors or omissions in the project's design, contract default, contractor or subcontractor default, performance bond surety default, the effects of local weather conditions, the possibility of local or national strikes and the possibility of shortages in materials, building supplies or energy and fuel for equipment); • tenants which pre-lease space or contract with us for a build-to-suit project may default prior to occupying the project; • upon completion of construction, we may not be able to obtain, or obtain on advantageous terms, permanent financing for activities that we financed through construction loans; • we may not achieve sufficient occupancy levels and/or obtain sufficient rents to make a completed project profitable; and • substantial renovation and development activities may require a significant amount of management’s time and attention, diverting their attention from our other operations. 13 Table of Contents Index to Financial Statements Actual or threatened public health epidemics or outbreaks of highly infectious or contagious diseases, such as the COVID-19 pandemic, as well as immediate and long-term governmental and private measures taken to combat such health crises, could have a material adverse effect on our business operations and financial results.
The potential termination or renegotiation of the terms of the interest rate derivative contracts as a result of changing counterparties through insolvency or merger could result in an adverse impact on our results of operations and cash flows.
The potential termination or renegotiation of the terms of the interest rate derivative contracts as a result of changing counterparties through default, insolvency or merger could result in an adverse impact on our results of operations and cash flows.
We may face additional risks and costs associated with directly managing properties occupied by government tenants. We currently own six properties in which at least one of the tenants is a federal government agency.
We may face additional risks and costs associated with directly managing properties occupied by government tenants. We currently own six projects in which at least one of the tenants is a federal government agency.
The revenues generated by the properties that any of our lead tenants occupy are substantially dependent upon the financial condition of these tenants and, accordingly, any event of bankruptcy, insolvency, or a general downturn in the business of any of these tenants may result in the failure or delay of such tenant’s rental payments, which may have a substantial adverse effect on our operating performance. 10 Table of Contents Index to Financial Statements Some of our leases provide tenants with the right to terminate their leases early.
The revenues generated by the properties that any of our significant tenants occupy are substantially dependent upon the financial condition of these tenants and, accordingly, any event of bankruptcy, insolvency, or a general downturn in the business of any of these tenants may result in the failure or delay of such tenant’s rental payments, which may have a substantial adverse effect on our operating performance. 10 Table of Contents Index to Financial Statements Some of our leases provide tenants with the right to terminate their leases early.
If market interest rates continue to increase, prospective investors may desire a higher yield on our common stock or seek securities paying higher dividends or yields. It is likely that the public valuation of our common stock will be based primarily on our earnings and cash flows and not from the underlying appraised value of the properties themselves.
If market interest rates increase, prospective investors may desire a higher yield on our common stock or seek securities paying higher dividends or yields. It is likely that the public valuation of our common stock will be based primarily on our earnings and cash flows and not from the underlying appraised value of the properties themselves.
This concentration exposes us to the risk of economic downturns in the office sector to a greater extent than if our portfolio also included other sectors of the real estate industry. Collectively, approximately 70% of our ALR is generated from our properties located in our Sunbelt markets as of December 31, 2023.
This concentration exposes us to the risk of economic downturns in the office sector to a greater extent than if our portfolio also included other sectors of the real estate industry. Collectively, approximately 70% of our ALR is generated from our properties located in our Sunbelt markets as of December 31, 2024.
The loss of our deposits could reduce the amount of cash we have available to distribute, to pay down maturing debt, or to invest, and could result in a decline in the value of our stockholders' investment. ITEM 1B. UNRESOLVED STAFF COMMENTS There were no unresolved SEC staff comments as of December 31, 2023.
The loss of our deposits could reduce the amount of cash we have available to distribute, to pay down maturing debt, or to invest, and could result in a decline in the value of our stockholders' investment. ITEM 1B. UNRESOLVED STAFF COMMENTS There were no unresolved SEC staff comments as of December 31, 2024.
Actual or threatened public health epidemics or outbreaks, and the actions taken to combat such epidemics or outbreaks, may adversely impact the global economy or the economic and other conditions in the markets in which we operate.
Actual or threatened public health epidemics or outbreaks of highly infectious or contagious diseases, and the actions taken to combat such epidemics or outbreaks, may adversely impact the global economy or the economic and other conditions in the markets in which we operate.
Risks Associated with Debt Financing We have incurred and are likely to continue to incur mortgage and other indebtedness, which may increase our business risks. As of December 31, 2023, we had total outstanding indebtedness of approximately $2.1 billion, including $197.0 million of mortgage debt.
Risks Associated with Debt Financing We have incurred and are likely to continue to incur mortgage and other indebtedness, which may increase our business risks. As of December 31, 2024, we had total outstanding indebtedness of approximately $2.2 billion, including $192.4 million of mortgage debt.
In addition, the employment agreements with certain of our executive officers contain, and grants under our incentive plan also may contain, change-in-control provisions that might similarly have an anti-takeover effect, inhibit a change of our management, or inhibit in certain circumstances tender offers for our common stock or proxy contests to change our board.
In addition, award agreements under our incentive plan contain change-in-control provisions that might similarly have an anti-takeover effect, inhibit a change of our management, or inhibit in certain circumstances tender offers for our common stock or proxy contests to change our board.
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The following factors, among others, may adversely affect the operating performance and long- or short-term value of our properties: • changes in the national, regional, or local economic climate, particularly in markets in which we have a concentration of properties; • local office market conditions such as employment rates and changes in the supply of, or demand for, space in properties similar to those that we own within a particular area; • changes in the patterns of office or parking garage use due to work-from-home arrangements, remote work technology (e.g.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe utilize external risk advisory and accounting firms to perform an audit focusing on entity-level, application and information technology general computer controls annually, as well as the full cybersecurity risk assessment mentioned above. Audit results and the risk assessments are reviewed by our Chief Financial and Administrative Officer, the principal of the MSSP, and our Vice President of Risk Management.
Biggest changeVerified cybersecurity incidents, should they occur, are reported to IT management and trigger response protocols detailed in the Incident Response Plan/Policy. We utilize external risk advisory and accounting firms to perform an audit focusing on entity-level, application and information technology general computer controls annually, as well as the full cybersecurity risk assessment mentioned above.
To assist our Chief Financial and Administrative Officer in discharging these responsibilities, we have a standing management committee to address information technology and cybersecurity risk matters comprised of our Chief Financial and Administrative Officer, the principal of a third-party, managed security service provider (an “MSSP”), our Vice President of Risk Management, our Chief Accounting Officer, our Senior Vice President of Human Resources and certain other members of our information technology staff and property management.
To assist our Chief Financial Officer in discharging these responsibilities, we have a standing management committee to address information technology and cybersecurity risk matters comprised of our Chief Financial Officer, the principal of a third-party, managed security service provider (an “MSSP”), our Vice President of Risk Management, our Chief Accounting Officer, our Senior Vice President of Human Resources and certain other members of our information technology staff and property management.
The Audit Committee receives quarterly updates summarizing on-going information technology and cybersecurity initiatives from our Chief Financial and Administrative Officer and reviews the results of our annual risk assessment and regular cyber risk assessment upon completion. Any significant issues identified are reported to the Audit Committee of the board of directors on a quarterly basis.
The Audit Committee receives quarterly updates summarizing on-going information technology and cybersecurity initiatives from our Chief Financial Officer and reviews the results of our annual risk assessment and regular cyber risk assessment upon completion. Any significant issues identified are reported to the Audit Committee of the board of directors on a quarterly basis.
Additionally, our Chief Financial and Administrative Officer partners with the MSSP and our information technology staff throughout the organization to manage material risks from cybersecurity threats, as well as to provide managerial and operational support for our information systems and information technology resources on a daily basis. 26 Table of Contents Index to Financial Statements We also maintain an incident response plan to coordinate the actions we take to prepare for, detect, respond to and recover from cybersecurity incidents, which include processes to triage, assess severity for, escalate, contain, investigate, and remediate the incident, as well as to comply with potentially applicable legal obligations and mitigate brand and reputational damage.
Additionally, our Chief Financial Officer partners with the MSSP and our information technology staff throughout the organization to manage material risks from cybersecurity threats, as well as to provide managerial and operational support for our information systems and information technology resources on a daily basis. 26 Table of Contents Index to Financial Statements We also maintain an Incident Response Plan/Policy to coordinate the actions we take to prepare for, detect, respond to and recover from cybersecurity incidents, which include processes to triage, assess severity for, escalate, contain, investigate, and remediate the incident, as well as to comply with potentially applicable legal obligations and mitigate brand and reputational damage.
As described above, our management team is responsible for the day-to-day assessment and management of material risks from cybersecurity threats through our Chief Financial and Administrative Officer, our standing management committee on information technology and cybersecurity risk matters and the MSSP.
As described above, our management team is responsible for the day-to-day assessment and management of material risks from cybersecurity threats through our Chief Financial Officer, our standing management committee on information technology and cybersecurity risk matters and the MSSP.
Included in our management of cybersecurity risk is our annual review of our Incident Response Plan/Policy, involving employees from all responsibility levels of the company. Our Chief Financial and Administrative Officer has primary responsibility for overseeing our information systems and information technology resources, including risks from cybersecurity threats.
Included in our management of cybersecurity risk is our bi-annual review of our Incident Response Plan/Policy, involving employees from all responsibility levels of the company. Our Chief Financial Officer has primary responsibility for overseeing our information systems and information technology resources, including risks from cybersecurity threats.
This committee meets on a quarterly basis, with additional meetings held as-needed throughout the year, to: • monitor emerging data protection laws and implement changes to our processes designed to comply with these laws; • identify and assess material risks from cybersecurity threats; • provide guidance on our cybersecurity strategy development and implementation; • ensure that regular risk assessments and appropriate mitigation strategies are in place; • ensure the performance of regular vulnerability and penetration testing and remediation of findings; • oversee the implementation and management of cybersecurity-related tools such as security information and event management systems; and • review relevant service organization controls reports for the MSSP that serves as our Security Operation Center; and • require training and security awareness programs for our employees.
The members of this committee meet on a quarterly basis, with additional full or sub-committee meetings held as-needed throughout the year, to: • monitor emerging data protection laws and implement changes to our processes designed to comply with these laws; • identify and assess material risks from cybersecurity threats; • provide guidance on our cybersecurity strategy development and implementation; • ensure that regular risk assessments and appropriate mitigation strategies are in place; • ensure the performance of regular vulnerability and penetration testing and remediation of findings; • oversee the implementation and management of cybersecurity-related tools such as security information and event management systems; • review relevant service organization controls reports for the MSSP that serves as our Security Operation Center; and • require training and security awareness programs for our employees.
The incident response plan is tested annually, with tabletop exercises to assess the validity of the plan and to make necessary modifications, as needed, on a bi-annual basis.
The Incident Response Plan/Policy is tested with tabletop exercises to assess the validity of the plan and to make necessary modifications, as needed, on a bi-annual basis.
We also identify and oversee cybersecurity risk from third-party service providers through our vendor management policy, which requires increasing levels of due diligence and required insurance coverages in proportion to each provider's access to our information systems.
We also identify and oversee cybersecurity risk from third-party service providers through our vendor management policy, overseen by our internal risk management and information technology functional areas, which requires increasing levels of due diligence and required insurance coverages in proportion to each provider's access to our information systems.
Personnel from the MSSP hold several certifications, including but not limited to: Certified Information Systems Security Professional ("CISSP"); ITIL Foundations; Fortinet Certified Network Security Administration and Professional; Microsoft Certified IT Professional, Technology Specialist, Solutions Associate; and Citrix Certified Administrator/Citrix Presentation Server 4.0.
Personnel from the MSSP hold several certifications, including but not limited to: Certified Information Systems Security Professional ("CISSP"); ITIL Foundations; Fortinet Certified Network Security Administration and Professional; and Microsoft Certified IT Professional, Technology Specialist, Solutions Associate.
Any exceptions are addressed with a remediation plan and implemented with appropriate resources. Audit results, risk assessments and remediation plans are discussed with the Audit Committee of the board of directors, who has responsibility for cybersecurity risk oversight, each quarter until all points are fully resolved.
Audit results, risk assessments and remediation plans are discussed with the Audit Committee of the board of directors, who has responsibility for cybersecurity risk oversight, each quarter until all points are fully resolved.
This process dictates minimum insurance requirements and increased security documentation and protocols as interaction with our systems increases. We also have an information security training and compliance program which includes cybersecurity updates, notices, reminders, and simulated cyber-attacks emailed to all employees bi-weekly and that all employees are required to participate in at least annually.
This process dictates minimum insurance requirements and increased security documentation and protocols as interaction with our systems increases. We also have a cybersecurity awareness training program which includes annual required online training, periodic updates, notices, and reminders, and bi-weekly simulated phishing attacks with required remedial training for failures.
Added
We utilize a third party Security Information and Event Management ("SIEM") service to collect, analyze, and correlate security logs and events from various sources across the Piedmont corporate and property networks to detect and respond to cyber threats in real-time. This service coordinates with the IT support team to contain threats and reduce impact.
Added
Audit results and the risk assessments are reviewed by our Chief Financial Officer, the principal of the MSSP, and our Vice President of Risk Management. Any exceptions are addressed with a remediation plan and implemented with appropriate resources.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeProperty Statistics The following table shows the geographic diversification of our in-service portfolio as of December 31, 2023: Location Annualized Lease Revenue (in thousands) Rentable Square Feet (in thousands) Percentage of Annualized Lease Revenue (%) Percent Leased (%) Atlanta $ 163,389 4,706 28.4 91.1 Dallas 112,753 3,478 19.6 80.4 Northern Virginia/Washington, D.C. 66,190 1,589 11.5 77.9 Minneapolis 65,381 2,104 11.4 89.6 Orlando 59,582 1,757 10.4 95.0 New York 49,142 1,045 8.5 87.3 Boston 39,301 1,270 6.8 85.0 Other (1) 19,729 614 3.4 91.2 $ 575,467 16,563 100.0 87.1 (1) Includes 1430 Enclave Parkway and Enclave Place in Houston, Texas. 28 Table of Contents Index to Financial Statements The following table shows lease expirations of our in-service office portfolio as of December 31, 2023 during each of the next twelve years and thereafter, assuming no exercise of renewal options or termination rights: Year of Lease Expiration Annualized Lease Revenue (in thousands) Percentage of Annualized Lease Revenue (%) 2023 (1) 8,691 1.5 2024 42,280 7.4 2025 69,771 12.1 2026 64,462 11.2 2027 53,412 9.3 2028 68,122 11.8 2029 56,012 9.7 2030 27,674 4.8 2031 28,655 5.0 2032 23,514 4.1 2033 11,022 1.9 2034 35,649 6.2 2035 19,233 3.4 Thereafter 66,970 11.6 $ 575,467 100.0 (1) Includes leases with an expiration date of December 31, 2023, comprised of approximately 351,000 square feet.
Biggest changeProperty Statistics The following table shows the geographic diversification of our in-service portfolio as of December 31, 2024: Location Annualized Lease Revenue (in thousands) Rentable Square Feet (in thousands) Percentage of Annualized Lease Revenue (%) Percent Leased (%) Atlanta $ 173,668 4,712 30.6 92.7 Dallas 106,736 2,917 18.8 85.8 Orlando 63,988 1,754 11.3 93.2 Northern Virginia / Washington, D.C. 59,224 1,579 10.4 69.7 New York 55,379 1,045 9.8 95.5 Minneapolis 47,811 1,434 8.4 88.9 Boston 40,524 1,268 7.2 86.7 Other (1) 20,014 614 3.5 91.2 $ 567,344 15,323 100.0 88.4 (1) Includes 1430 Enclave Parkway and Enclave Place in Houston, Texas. 28 Table of Contents Index to Financial Statements The following table shows lease expirations of our in-service office portfolio as of December 31, 2024 during each of the next twelve years and thereafter, assuming no exercise of renewal options or termination rights: Year of Lease Expiration Annualized Lease Revenue (in thousands) Percentage of Annualized Lease Revenue (%) 2024 (1) 7,702 1.4 2025 41,933 7.4 2026 68,714 12.1 2027 50,551 8.9 2028 51,515 9.1 2029 54,854 9.7 2030 54,553 9.6 2031 35,075 6.2 2032 33,750 5.9 2033 10,198 1.8 2034 40,416 7.1 2035 29,553 5.2 2036 21,564 3.8 Thereafter 66,966 11.8 $ 567,344 100.0 (1) Includes leases with an expiration date of December 31, 2024, comprised of approximately 131,000 square feet.
Certain Restrictions Related to our Properties As of December 31, 2023, only 1180 Peachtree Street in Atlanta, Georgia was held as collateral for debt, and there were no properties subject to underlying ground leases. Refer to Schedule III listed in the index of Item 15(a) of this report, for further details regarding our properties as of December 31, 2023.
Certain Restrictions Related to our Properties As of December 31, 2024, only 1180 Peachtree Street in Atlanta, Georgia was held as collateral for debt, and there were no properties subject to underlying ground leases. Refer to Schedule III listed in the index of Item 15(a) of this report, for further details regarding our properties as of December 31, 2024.
ALR related to our in-service portfolio was $575.5 million, or $39.89 per leased square foot, as of December 31, 2023 as compared with $555.3 million, or $38.46 per leased square foot, as of December 31, 2022.
ALR related to our in-service portfolio was $567.3 million, or $41.91 per leased square foot, as of December 31, 2024 as compared with $575.5 million, or $39.89 per leased square foot, as of December 31, 2023.
As of December 31, 2023 and 2022, our in-service portfolio was 87.1% and 86.7% leased, respectively, with an average lease term remainin g as of each period end of approximately six years and an average lease size of 15,000 square feet.
ITEM 2. PROPERTIES Overview As of December 31, 2024, we owned and operated a portfolio comprised of 30 in-service projects and three redevelopment projects. As of December 31, 2024 and 2023, our in-service p ortfolio was 88.4% and 87.1% leased, respectively, with an average lease term remaining as of each period end of six years.
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ITEM 2. PROPERTIES Overview As of December 31, 2023, we owned interests in 51 in-service office properties, with approximately 70% of our ALR generated from our properties located in major U.S. Sunbelt markets .
Added
As of December 31, 2024, our average lease size was approximately 14,000 square feet, and only one tenant, the State of New York at our 60 Broad Street project, accounts for more than 5% of our ALR.
Removed
No tenant accounts for more than 5% of our ALR, and only a total of three tenants, individually, account for 3% or more of our ALR.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePurchases of Equity Securities By the Issuer and Affiliated Purchasers There were no repurchases of shares of our common stock during the fourth quarter of 2023. As of December 31, 2023 approximately $150.5 million remains available under our board-authorized stock repurchase program; however, this plan expired in February 2024 with no additional purchases.
Biggest changePurchases of Equity Securities By the Issuer and Affiliated Purchasers There were no repurchases of shares of our common stock during the fourth quarter of 2024.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information and Holders Our common stock is listed on the New York Stock Exchange under the symbol “PDM.” As of February 16, 2024, there were 7,277 common stockholders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information and Holders Our common stock is listed on the New York Stock Exchange under the symbol “PDM.” As of February 18, 2025, there were 6,711 common stockholders of record of our common stock.
Comparison of Cumulative Total Return of One or More Companies, Peer Groups, Industry Indices, and/or Broad Markets As of the year ended December 31, 2018 2019 2020 2021 2022 2023 Piedmont Office Realty Trust, Inc. $ 100.00 $ 135.92 $ 104.01 $ 123.38 $ 65.70 $ 56.04 FTSE NAREIT Equity Office $ 100.00 $ 131.42 $ 107.19 $ 130.77 $ 81.58 $ 83.23 FTSE NAREIT Equity REITs $ 100.00 $ 126.00 $ 115.92 $ 166.04 $ 125.58 $ 142.83 S&P 500 $ 100.00 $ 131.49 $ 155.68 $ 200.37 $ 164.08 $ 207.21 The performance graph above is being furnished as part of this Annual Report solely in accordance with the requirement under Rule 14a-3(b)(9) to furnish Piedmont’s stockholders with such information and, therefore, is not deemed to be filed with the SEC or subject to the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and should not be deemed to be incorporated by reference into any of our prior or subsequent filings under the Securities Act of 1933, as amended. 31 Table of Contents Index to Financial Statements Sales of Unregistered Equity Securities There were no unregistered sales of equity securities during the fourth quarter of 2023.
Comparison of Cumulative Total Return of One or More Companies, Peer Groups, Industry Indices, and/or Broad Markets As of the year ended December 31, 2019 2020 2021 2022 2023 2024 Piedmont Office Realty Trust, Inc. $ 100.00 $ 76.52 $ 90.77 $ 48.33 $ 41.23 $ 56.56 FTSE NAREIT Equity Office $ 100.00 $ 81.56 $ 99.51 $ 62.07 $ 63.34 $ 76.95 FTSE NAREIT Equity REITs $ 100.00 $ 92.00 $ 131.78 $ 99.67 $ 113.35 $ 123.25 S&P 500 $ 100.00 $ 118.4 $ 152.39 $ 124.79 $ 157.59 $ 197.02 The performance graph above is being furnished as part of this Annual Report solely in accordance with the requirement under Rule 14a-3(b)(9) to furnish Piedmont’s stockholders with such information and, therefore, is not deemed to be filed with the SEC or subject to the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and should not be deemed to be incorporated by reference into any of our prior or subsequent filings under the Securities Act of 1933, as amended. 31 Table of Contents Index to Financial Statements Sales of Unregistered Equity Securities There were no unregistered sales of equity securities during the fourth quarter of 2024.
The amount of distributions paid and the taxable portion thereof in prior periods are not necessarily indicative of amounts anticipated in future periods.
Distributions We intend to make distributions each taxable year equal to at least 90% of our REIT taxable income. The amount of distributions paid and the taxable portion thereof in prior periods are not necessarily indicative of amounts anticipated in future periods.
As of December 31, 2023, approximately $150.5 million of share repurchase capacity remained; however, this plan expired in February 2024 with no additional purchases. 30 Table of Contents Index to Financial Statements Performance Graph The following graph compares the cumulative total return of Piedmont’s common stock with the FTSE NAREIT Equity Office Index, the FTSE NAREIT Equity REITs Index, and the S&P 500 Index for the period beginning on December 31, 2018 through December 31, 2023.
Our board of directors declared a quarterly dividend of $0.125 per common share for each of the four quarters in the year ended December 31, 2024. 30 Table of Contents Index to Financial Statements Performance Graph The following graph compares the cumulative total return of Piedmont’s common stock with the FTSE NAREIT Equity Office Index, the FTSE NAREIT Equity REITs Index, and the S&P 500 Index for the period beginning on December 31, 2019 through December 31, 2024.
Removed
Distributions We intend to make distributions each taxable year equal to at least 90% of our REIT taxable income (not including a return of capital for federal income tax purposes). One of our primary goals is to pay regular quarterly distributions to our stockholders.
Removed
Our board of directors declared a quarterly dividend of $0.21 per common share for the first and second quarter of 2023, and a quarterly dividend of $0.125 per common share for the third and fourth quarter of 2023.
Removed
During the year ended December 31, 2023, we had a board-authorized stock repurchase program in place that allowed management to repurchase shares of our common stock when they believed such purchases would be a prudent use of capital. No shares were repurchased during the year ended December 31, 2023.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeOther REITs may not define AFFO in the same manner as us; therefore, our computation of AFFO may not be comparable to the computation of other REITs. 39 Table of Contents Index to Financial Statements Reconciliations of net income/(loss) to FFO, Core FFO, and AFFO for the years ended December 31, 2023, 2022, and 2021, respectively, are presented below (in thousands except per share amounts): 2023 Per Share (1) 2022 Per Share (1) 2021 Per Share (1) GAAP net income/(loss) applicable to common stock $ (48,387) $ (0.39) $ 146,830 $ 1.19 $ (1,153) $ (0.01) Depreciation of real assets 147,569 1.19 132,849 1.07 119,629 0.96 Amortization of lease-related costs 87,717 0.71 90,891 0.74 85,946 0.69 Impairment charges 29,446 0.24 25,981 0.21 41,000 0.33 Gain on sale of real estate assets (1,946) (0.02) (151,729) (1.23) — — NAREIT Funds From Operations applicable to common stock $ 214,399 $ 1.73 $ 244,822 $ 1.98 $ 245,422 $ 1.97 Adjustments: Severance costs associated management reorganization — — 2,248 0.02 — — Loss on early extinguishment of debt 820 0.01 — — — — Core Funds From Operations applicable to common stock $ 215,219 $ 1.74 $ 247,070 $ 2.00 $ 245,422 $ 1.97 Adjustments: Amortization of debt issuance costs, fair market adjustments on notes payable, and discounts on debt 5,442 3,389 2,857 Depreciation of non real estate assets 847 728 949 Straight-line effects of lease revenue (7,268) (11,230) (10,566) Stock-based compensation adjustments 6,337 4,833 7,924 Amortization of lease-related intangibles (13,879) (13,426) (11,290) Non-incremental capital expenditures (2) (53,690) (53,324) (75,162) Adjusted Funds From Operations applicable to common stock $ 153,008 $ 178,040 $ 160,134 Weighted-average shares outstanding – diluted 123,702 (3) 123,524 124,455 (3) (1) Based on weighted-average shares outstanding—diluted.
Biggest changeOther REITs may not define AFFO in the same manner as us; therefore, our computation of AFFO may not be comparable to the computation of other REITs. 39 Table of Contents Index to Financial Statements Reconciliations of net income/(loss) to FFO, Core FFO, and AFFO for the years ended December 31, 2024, 2023, and 2022, respectively, are presented below (in thousands except per share amounts): 2024 2023 2022 GAAP net income/(loss) applicable to common stock $ (79,069) $ (48,387) $ 146,830 Depreciation of real assets 155,468 147,569 132,849 Amortization of lease-related costs 69,674 87,717 90,891 Impairment charges 33,832 29,446 25,981 Loss/(gain) on sale of real estate assets 445 (1,946) (151,729) NAREIT FFO applicable to common stock $ 180,350 $ 214,399 $ 244,822 Adjustments: Executive separation costs 4,831 — 2,248 Loss on early extinguishment of debt 386 820 — Core FFO applicable to common stock $ 185,567 $ 215,219 $ 247,070 Adjustments: Amortization of debt issuance costs, fair market adjustments on notes payable, and discounts on debt 5,142 5,442 3,389 Depreciation of non real estate assets 1,320 847 728 Straight-line effects of lease revenue (9,233) (7,268) (11,230) Stock-based compensation adjustments 6,632 6,337 4,833 Amortization of lease-related intangibles (10,019) (13,879) (13,426) Non-incremental capital expenditures (1) (70,170) (53,690) (53,324) AFFO applicable to common stock $ 109,239 $ 153,008 $ 178,040 Weighted-average shares outstanding – diluted 124,926 (2) 123,702 (2) 123,524 NAREIT FFO per share (diluted) $ 1.44 $ 1.73 $ 1.98 Core FFO per share (diluted) $ 1.49 (3) $ 1.74 (3) $ 2.00 (1) We define non-incremental capital expenditures as capital expenditures of a recurring nature related to tenant improvements, leasing commissions, and building capital that do not incrementally enhance the underlying assets' income generating capacity.
In particular, Piedmont guarantees to each holder of the Notes that the principal and interest will be paid in full when due, whether at the maturity dates of the respective loans, or upon acceleration, upon redemption, or otherwise; interest on overdue principal and interest on any overdue interest, if any, will also be paid in full when due; and all other obligations of the Issuer to the holders of the Notes will be promptly paid in full.
In particular, Piedmont guarantees to each holder of the Notes that the principal and interest on the Notes will be paid in full when due, whether at the maturity dates of the respective loans, or upon acceleration, upon redemption, or otherwise; interest on overdue principal and interest on any overdue interest, if any, on the Notes will also be paid in full when due; and all other obligations of the Issuer to the holders of the Notes will be promptly paid in full.
For Property NOI (cash basis), the effects of non-cash general reserve for uncollectible accounts, straight-lined rents and fair value lease revenue are also eliminated; while such effects are not adjusted in calculating Property NOI (accrual basis).
For Property NOI (cash basis), the effects of the reversal of the non-cash general reserve for uncollectible accounts, straight-lined rents and fair value lease revenue are also eliminated; while such effects are not adjusted in calculating Property NOI (accrual basis).
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis should be read in conjunction with our audited consolidated financial statements and notes thereto as of December 31, 2023 and 2022, and for the years ended December 31, 2023, 2022, and 2021, included elsewhere in this Annual Report on Form 10-K.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis should be read in conjunction with our audited consolidated financial statements and notes thereto as of December 31, 2024 and 2023, and for the years ended December 31, 2024, 2023, and 2022, included elsewhere in this Annual Report on Form 10-K.
Management's Discussion and Analysis of Financial Condition and Results of Operations - Results of Operations (2022 vs. 2021)" in our Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC on February 22, 2023, for a discussion of the results of operations for the year ended December 31, 2022 as compared to the year ended December 31, 2021. 36 Table of Contents Index to Financial Statements Issuer and Guarantor Financial Information As of December 31, 2023, Piedmont, through its wholly-owned subsidiary Piedmont OP, had four separate issuances totaling approximately $1.3 billion of senior unsecured notes payable outstanding that mature in 2024, 2028, 2030 and 2032 (see Note 3 to our accompanying consolidated financial statements for additional details regarding each of these issuances) (collectively, the "Notes").
Management's Discussion and Analysis of Financial Condition and Results of Operations - Results of Operations (2022 vs. 2021)" in our Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on February 20, 2024, for a discussion of the results of operations for the year ended December 31, 2023 as compared to the year ended December 31, 2022. 36 Table of Contents Index to Financial Statements Issuer and Guarantor Financial Information As of December 31, 2024, Piedmont, through its wholly-owned subsidiary Piedmont OP, had four separate issuances totaling approximately $1.6 billion of senior unsecured notes payable outstanding that mature in 2028, 2029, 2030 and 2032 (see Note 3 to our accompanying consolidated financial statements for additional details regarding each of these issuances) (collectively, the "Notes").
Liquidity and Capital Resources We intend to use cash on hand, cash flow generated from the operation of our properties, net proceeds from the disposition of select properties, and borrowings under our $600 Million Unsecured 2022 Line of Credit as our primary sources of immediate liquidity.
Liquidity and Capital Resources We intend to use cash on hand, cash flows generated from the operation of our properties, net proceeds from the disposition of select properties, and borrowings under our $600 Million Unsecured 2022 Line of Credit as our primary sources of immediate liquidity.
The amount and form of payment (cash or stock issuance) of future dividends to be paid to our stockholders will continue to be largely dependent upon (i) the amount of cash generated from our operating activities; (ii) our expectations of future cash flows; (iii) our determination of near-term cash needs for debt repayments, development projects, and selective acquisitions of new properties; (iv) the timing of significant expenditures for tenant improvements, leasing commissions, building redevelopment projects, and general property capital improvements; (v) long-term dividend payout ratios for comparable companies; (vi) our ability to continue to access additional sources of capital, including potential sales of our properties; and (vii) the amount required to be distributed to maintain our status as a REIT.
The amount and form of payment (cash or stock issuance) of future dividends to be paid to our stockholders will continue to be largely dependent upon (i) the amount of cash generated from our operating activities; (ii) our expectations of future cash flows; (iii) our determination of near-term cash needs for debt repayments, development projects, and selective acquisitions of new properties; (iv) the timing of significant expenditures for tenant improvements, leasing commissions, building redevelopment projects, and general property capital improvements; (v) long-term dividend payout ratios for comparable companies; (vi) our ability to continue to access additional sources of capital, including potential sales of our properties; (vii) our desire to reduce overall leverage; and (viii) the amount required to be distributed to maintain our status as a REIT.
With the fluctuating nature of cash flows and expenditures, we may periodically borrow funds on a short-term basis to cover timing differences in cash receipts and cash disbursements, including to pay dividends to our stockholders. 34 Table of Contents Index to Financial Statements Results of Operations (2023 vs. 2022) Overview Net loss applicable to common stockholders for the year ended December 31, 2023 was approximately $48.4 million, or $0.39 per diluted share, as compared with net income applicable to common stockholders of $146.8 million, or $1.19 per diluted share, for the year ended December 31, 2022.
With the fluctuating nature of cash flows and expenditures, we may periodically borrow funds on a short-term basis to cover timing differences in cash receipts and cash disbursements, including to pay dividends to our stockholders. 34 Table of Contents Index to Financial Statements Results of Operations (2024 vs. 2023) Overview Net loss applicable to common stockholders for the year ended December 31, 2024 was approximately $79.1 million, or $0.64 per diluted share, as compared with net loss applicable to common stockholders of $48.4 million, or $0.39 per diluted share, for the year ended December 31, 2023.
To the extent the square footage from new leases for currently vacant space exceeds or falls short of the square footage associated with non-renewing expirations, such leases would increase or decrease our overall leased percentage, respectively.
To the extent the square footage from new leases for currently vacant space in our in-service portfolio exceeds or falls short of the square footage associated with non-renewing expirations, such leases would increase or decrease our in-service leased percentage, respectively.
The changing of these assumptions and the subjectivity of assumptions used in the future cash flow analysis, including capitalization and discount rates, could result in a changed assessment or an incorrect assessment of the property’s estimated fair value and, therefore, could result in the misstatement of the carrying value of our real estate and related intangible assets and our reported net income/(loss) attributable to Piedmont.
The changing of these assumptions and the subjectivity of assumptions used in the future cash flow analysis, including capitalization and discount rates, could result in a changed assessment or an incorrect assessment of the property’s estimated fair value and, therefore, could result in the 44 Table of Contents Index to Financial Statements misstatement of the carrying value of our real estate and related intangible assets and our reported net income/(loss) attributable to Piedmont.
As mentioned above, our diverse portfolio and the magnitude of some of our tenants' leased spaces can result in rent roll ups and roll downs that can fluctuate widely on a building-by-building and a quarter-to-quarter basis.
As discussed above, our diverse portfolio and the magnitude of some of our tenants' leased spaces can result in rent roll ups and roll downs that can fluctuate widely on a project-by-project and a quarter-to-quarter basis.
When we conclude that we are the owner of tenant improvements, we record the cost to construct the tenant improvements as an asset and commence rental revenue recognition when the tenant takes possession of or controls the finished space, which is typically when the improvements being recorded as our asset are substantially complete, and our landlord obligation has been 45 Table of Contents Index to Financial Statements materially satisfied.
When we conclude that we are the owner of tenant improvements, we record the cost to construct the tenant improvements as an asset and commence rental revenue recognition when the tenant takes possession of or controls the finished space, which is typically when the improvements being recorded as our asset are substantially complete, and our landlord obligation has been materially satisfied.
As of December 31, 2023, we had approximately 1.1 million square feet of executed leases for vacant space yet to commence or under rental abatement, representing approximately $35 million of future additional annual cash rents.
As of December 31, 2024, we had approximately 1.4 million square feet of executed leases for vacant space yet to commence or under rental abatement, representing approximately $46 million of future additional annual cash rents.
In addition, adverse economic conditions could also cause us to recognize additional asset impairment charges in the future, which could materially and adversely affect our business, financial condition and results of operations. See Note 6 to our accompanying consolidated financial statements for more details regarding our goodwill for the years ended December 31, 2023 and 2022.
In addition, adverse economic conditions could also cause us to recognize additional asset impairment charges in the future, which could materially and adversely affect our business, financial condition and results of operations. See Note 2 and Note 6 to our accompanying consolidated financial statements for more details regarding our goodwill.
In the event that the expected undiscounted future cash flows for assets held for use or the estimated fair value, less costs to sell, for 44 Table of Contents Index to Financial Statements assets held for sale do not exceed the respective asset carrying value, we adjust such assets to the respective estimated fair values and recognize an impairment loss.
In the event that the expected undiscounted future cash flows for assets held for use or the estimated fair value, less costs to sell, for assets held for sale do not exceed the respective asset carrying value, we adjust such assets to the respective estimated fair values and recognize an impairment loss.
Additionally, as of December 31, 2023, we owned two properties in Houston that did not meet the definition of an operating or reportable segment as the CODM does not regularly review these properties for purposes of allocating resources or assessing performance, and we do not maintain a significant presence or anticipate further investment in this market.
Additionally, as of December 31, 2024, we owned two properties in Houston that did not meet the definition of an operating or reportable segment as the CODM does not regularly review these properties for purposes of allocating resources or assessing performance, and we do not maintain a significant presence or anticipate further investment in 37 Table of Contents Index to Financial Statements this market.
Pursuant to Rule 13-01 of Regulation S-X, Guarantors and Issuers of Guaranteed Securities Registered or Being Registered, the following tables present summarized financial information for Piedmont OP as issuer and Piedmont as guarantor on a combined basis after elimination of (i) intercompany transactions and balances among Piedmont OP and Piedmont and (ii) equity in earnings from and investments in any subsidiary that is a non-guarantor (in thousands): Combined Balances of Piedmont OP and Piedmont Office Realty Trust, Inc. as Issuer and Guarantor, respectively As of December 31, 2023 As of December 31, 2022 Due from non-guarantor subsidiary $ 900 $ 900 Total assets $ 285,116 $ 325,884 Total liabilities $ 1,926,434 $ 1,845,551 For the Year Ended December 31, 2023 Total revenues $ 48,429 Net loss $ (115,485) 37 Table of Contents Index to Financial Statements Net Operating Income by Geographic Segment Our President and Chief Executive Officer is our chief operating decision maker ("CODM") who evaluates our portfolio and assesses the ongoing operations and performance of our properties utilizing the following geographic segments: Atlanta, Dallas, Orlando, Northern Virginia/Washington, D.C., Minneapolis, New York, and Boston.
Pursuant to Rule 13-01 of Regulation S-X, Guarantors and Issuers of Guaranteed Securities Registered or Being Registered, the following tables present summarized financial information for Piedmont OP as issuer and Piedmont as guarantor on a combined basis after elimination of (i) intercompany transactions and balances among Piedmont OP and Piedmont and (ii) equity in earnings from and investments in any subsidiary that is a non-guarantor (in thousands): Combined Balances of Piedmont OP and Piedmont Office Realty Trust, Inc. as Issuer and Guarantor, respectively As of December 31, 2024 As of December 31, 2023 Due from non-guarantor subsidiary $ 900 $ 900 Total assets $ 376,871 $ 285,116 Total liabilities $ 2,108,306 $ 1,926,434 For the Year Ended December 31, 2024 Total revenues $ 47,212 Net loss $ (117,558) Net Operating Income by Geographic Segment Our President and Chief Executive Officer is our chief operating decision maker ("CODM"), who evaluates our portfolio and assesses the ongoing operations and performance of our projects utilizing the following geographic segments: Atlanta, Dallas, Orlando, Northern Virginia/Washington, D.C., Minneapolis, New York, and Boston.
For leases executed during the year ended December 31, 2023, we have committed to spend approximately $5.22 per square foot per year of lease term for tenant improvement allowances and lease commissions (net of expired lease commitments) as compared to $5.34 (net of expired lease commitments) for the year ended December 31, 2022.
For leases executed during the year ended December 31, 2024, we have committed to spend approximately $5.67 per square foot per year of lease term for tenant improvement allowances and lease commissions (net of expired lease commitments) as 33 Table of Contents Index to Financial Statements compared to $5.22 (net of expired lease commitments) for the year ended December 31, 2023.
The asset is depreciated and the deferred revenue is amortized and recognized as rental revenue over the term of the related lease beginning upon substantial completion of the leased premises.
The asset is depreciated and the deferred 45 Table of Contents Index to Financial Statements revenue is amortized and recognized as rental revenue over the term of the related lease beginning upon substantial completion of the leased premises.
The following table sets forth selected data from our consolidated statements of operations for the years ended December 31, 2023 and 2022, respectively, as well as each balance as a percentage of total revenues for the years presented (dollars in millions): December 31, 2023 % of Revenues December 31, 2022 % of Revenues Variance Revenue: Rental and tenant reimbursement revenue $ 555.3 $ 545.7 $ 9.6 Property management fee revenue 1.7 1.7 — Other property related income 20.7 16.4 4.3 Total revenues 577.7 100 % 563.8 100 % 13.9 Expense: Property operating costs 235.1 41 % 226.1 40 % 9.0 Depreciation 148.4 26 % 133.6 24 % 14.8 Amortization 87.7 15 % 90.9 16 % (3.2) Impairment charges 29.4 4 % 26.0 4 % 3.4 General and administrative 29.2 5 % 29.1 5 % 0.1 529.8 505.7 24.1 Other income (expense): Interest expense (101.3) 18 % (65.7) 12 % (35.6) Other income 3.9 1 % 2.7 — % 1.2 Loss on early extinguishment of debt (0.8) — % — — % (0.8) Gain on sale of real estate assets 1.9 — % 151.7 27 % (149.8) Net income/(loss) $ (48.4) (8) % $ 146.8 26 % $ (195.2) Revenue Rental and tenant reimbursement revenue increased approximately $9.6 million for the year ended December 31, 2023 as compared to the prior year.
The following table sets forth selected data from our consolidated statements of operations for the years ended December 31, 2024 and 2023, respectively, as well as each balance as a percentage of total revenues for the years presented (dollars in millions): December 31, 2024 % of Revenues December 31, 2023 % of Revenues Variance Revenue: Rental and tenant reimbursement revenue $ 544.1 $ 555.3 $ (11.2) Property management fee revenue 1.7 1.7 — Other property related income 24.5 20.7 3.8 Total revenues 570.3 100 % 577.7 100 % (7.4) Expense: Property operating costs 234.1 41 % 235.1 41 % (1.0) Depreciation 156.9 28 % 148.4 26 % 8.5 Amortization 69.7 12 % 87.7 15 % (18.0) Impairment charges 33.8 6 % 29.4 4 % 4.4 General and administrative 35.4 6 % 29.2 5 % 6.2 529.9 529.8 0.1 Other income (expense): Interest expense (123.0) 22 % (101.3) 18 % (21.7) Other income 4.3 1 % 3.9 1 % 0.4 Loss on early extinguishment of debt (0.4) — % (0.8) — % 0.4 Gain on sale of real estate assets (0.4) — % 1.9 — % (2.3) Net loss $ (79.1) (14) % $ (48.4) 8 % $ (30.7) Revenue Rental and tenant reimbursement revenue decreased approximately $11.2 million for the year ended December 31, 2024 as compared to the prior year.
Both the timing and magnitude of expenditures related to future leasing activity can vary 33 Table of Contents Index to Financial Statements due to a number of factors and are highly dependent on the size of the leased square footage, length of lease term, and the competitive market conditions of the particular office market at the time a lease is being negotiated.
Both the timing and magnitude of expenditures related to future leasing activity can vary due to a number of factors and are highly dependent on the size of the leased square footage, length of the lease term, and the competitive market conditions of the particular office market at the time a lease is being negotiated, in addition to the impact of inflation and rising costs of construction.
Other REITs may not define Core EBITDA in the same manner as us; therefore, our computation of Core EBITDA may not be comparable to that of other REITs. (3) Presented net of related operating expenses incurred to earn such management fee revenue. (4) Acquisitions include 1180 Peachtree Street in Atlanta, Georgia, purchased during the third quarter of 2022.
Other REITs may not define Core EBITDA in the same manner as us; therefore, our computation of Core EBITDA may not be comparable to that of other REITs. (3) Presented net of related operating expenses incurred to earn such management fee revenue.
Consequently, our determination as to whether we, or our tenant, are the owner of tenant improvements for accounting purposes has a significant impact on both the amount and timing of rental revenue that we record related to tenant-funded tenant improvements. Related-Party Transactions and Agreements There were no related-party transactions during the three years ended December 31, 2023.
Consequently, our determination as to whether we, or our tenant, are the owner of tenant improvements for accounting purposes has a significant impact on both the amount and timing of rental revenue that we record related to tenant-funded tenant improvements.
Although repayment of debt is currently our priority, subject to the identification and availability of attractive investment opportunities and our ability to consummate such acquisitions on satisfactory terms, acquiring new assets consistent with our investment strategy could also be a significant use of capital. We also use capital resources to pay dividends to our stockholders.
Although reducing outstanding debt remains our priority, subject to the identification and availability of a few, select investment opportunities and our ability to consummate such acquisitions on satisfactory terms, acquiring new assets consistent with our investment strategy could also be a significant use of capital.
As of December 31, 2023, we had one individually significant unrecorded tenant allowance commitment greater than $10.0 million.
As of December 31, 2024, we had two individually significant unrecorded tenant allowance commitments greater than $10 million.
The increase was primarily due to additional building and tenant improvements acquired and/or placed in service subsequent to January 1, 2022, as well as the acquisition of 1180 Peachtree Street mentioned above. Amortization expense decreased approximately $3.2 million for the year ended December 31, 2023 compared to the prior year.
The increase was primarily due to additional building and tenant improvements acquired and/or placed in service subsequent to January 1, 2023. Amortization expense decreased approximately $18.0 million for the year ended December 31, 2024 compared to the prior year.
Other REITs may not define Same Store NOI in the same manner as we do; therefore, our computation of Same Store NOI may not be comparable to that of other REITs. 41 Table of Contents Index to Financial Statements The following table sets forth a reconciliation from net income/(loss) calculated in accordance with GAAP to EBITDAre, Core EBITDA, Property NOI, and Same Store NOI on both a cash and accrual basis, for the years ended December 31, 2023 and 2022, respectively (in thousands): Cash Basis Accrual Basis December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Net income/(loss) applicable to Piedmont (GAAP basis) $ (48,387) $ 146,830 $ (48,387) $ 146,830 Net income applicable to noncontrolling interest 10 — 10 — Interest expense 101,258 65,656 101,258 65,656 Depreciation 148,417 133,577 148,417 133,577 Amortization 87,717 90,891 87,717 90,891 Depreciation and amortization attributable to noncontrolling interests 80 85 80 85 Impairment charges 29,446 25,981 29,446 25,981 Gain on sale of real estate assets (1,946) (151,729) (1,946) (151,729) EBITDAre (1) 316,595 311,291 316,595 311,291 Loss on early extinguishment of debt 820 — 820 — Severance costs associated management reorganization — 2,248 — 2,248 Core EBITDA (2) 317,415 313,539 317,415 313,539 General & administrative expenses 29,190 26,879 29,190 26,879 Management fee revenue (3) (1,004) (1,004) (1,004) (1,004) Other income (3,256) (1,847) (3,256) (1,847) Reversal of non-cash general reserve for uncollectible accounts (1,000) (3,000) Straight-line rent effects of lease revenue (7,268) (11,230) Straight-line effects of lease revenue attributable to noncontrolling interests (10) (10) Amortization of lease-related intangibles (13,879) (13,426) Property NOI 320,188 309,901 342,345 337,567 Net operating (income)/loss from: Acquisitions (4) (22,907) (8,180) (30,167) (11,717) Dispositions (5) 65 (10,714) 65 (10,826) Other investments (6) 790 763 387 651 Same Store NOI $ 298,136 $ 291,770 $ 312,630 $ 315,675 Change period over period in Same Store NOI 2.2 % N/A (1.0) % N/A (1) We calculate Earnings Before Interest, Taxes, Depreciation, and Amortization- Real Estate ("EBITDAre") in accordance with the current NAREIT definition.
Other REITs may not define Same Store NOI in the same manner as we do; therefore, our computation of Same Store NOI may not be comparable to that of other REITs. 41 Table of Contents Index to Financial Statements The following table sets forth a reconciliation from net income/(loss) calculated in accordance with GAAP to EBITDAre, Core EBITDA, Property NOI, and Same Store NOI on both a cash and accrual basis, for the years ended December 31, 2024 and 2023, respectively (in thousands): Cash Basis Accrual Basis December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023 Net loss applicable to Piedmont (GAAP basis) $ (79,069) $ (48,387) $ (79,069) $ (48,387) Net income applicable to noncontrolling interest 5 10 5 10 Interest expense 122,984 101,258 122,984 101,258 Depreciation 156,787 148,417 156,787 148,417 Amortization 69,674 87,717 69,674 87,717 Depreciation and amortization attributable to noncontrolling interests 79 80 79 80 Impairment charges 33,832 29,446 33,832 29,446 Loss/(gain) on sale of real estate assets 445 (1,946) 445 (1,946) EBITDAre (1) 304,737 316,595 304,737 316,595 Loss on early extinguishment of debt 386 820 386 820 Executive separation costs 4,831 — 4,831 — Core EBITDA (2) 309,954 317,415 309,954 317,415 General & administrative expenses 30,592 29,190 30,592 29,190 Management fee revenue (3) (1,091) (1,004) (1,091) (1,004) Other income (3,915) (3,256) (3,915) (3,256) Reversal of non-cash general reserve for uncollectible accounts — (1,000) Straight-line rent effects of lease revenue (9,233) (7,268) Straight-line effects of lease revenue attributable to noncontrolling interests 3 (10) Amortization of lease-related intangibles (10,019) (13,879) Property NOI 316,291 320,188 335,540 342,345 Net operating (income)/loss from: Acquisitions — — — — Dispositions (4) (1,783) (3,343) (2,067) (4,132) Other investments (5) (745) (10,957) (1,198) (11,046) Same Store NOI $ 313,763 $ 305,888 $ 332,275 $ 327,167 Change period over period in Same Store NOI 2.6 % N/A 1.6 % N/A (1) We calculate Earnings Before Interest, Taxes, Depreciation, and Amortization- Real Estate ("EBITDAre") in accordance with the current NAREIT definition.
During the years ended December 31, 2023 and 2022, we incurred the following types of capital expenditures (in thousands): December 31, 2023 December 31, 2022 Capital expenditures for redevelopment/renovations $ 57,630 $ 59,435 Other capital expenditures, including building and tenant improvements 100,561 61,924 Total capital expenditures (1) $ 158,191 $ 121,359 (1) Of the total amounts paid, approximately $10.1 million and $7.2 million related to soft costs such as capitalized interest, payroll, and other general and administrative expenses for the year ended December 31, 2023 and 2022, respectively.
During the years ended December 31, 2024 and 2023, we incurred the following types of capital expenditures (in thousands): December 31, 2024 December 31, 2023 Capital expenditures for redevelopment/renovations $ 96,733 $ 55,909 Other capital expenditures, including building and tenant improvements 115,375 102,282 Total capital expenditures (1) $ 212,108 $ 158,191 (1) Of the total amounts paid, approximately $19.9 million and $10.1 million related to soft costs such as capitalized interest, payroll, and other general and administrative expenses for the year ended December 31, 2024 and 2023, respectively.
"Capital expenditures for redevelopment/renovations" during the years ended December 31, 2023 and 2022 primarily related to building upgrades, primarily to the lobbies and the addition of tenant amenities at our 60 Broad Street building in New York City, our Galleria Tower buildings in Dallas, Texas, as well as our 222 South Orange building in Orlando, Florida, and our Galleria on the Park buildings, 1155 Perimeter Center West, and 999 Peachtree Street in Atlanta, Georgia, among others.
"Capital expenditures for redevelopment/renovations" during the years ended December 31, 2024 and 2023 related to building upgrades, primarily to the lobbies and the addition of tenant amenities at certain of our buildings, including: Galleria Towers in Dallas, Texas; The Exchange in Orlando, Florida; 999 Peachtree Street and Galleria on the Park in Atlanta, Georgia, and Meridian in suburban Minneapolis, Minnesota, among others, most of which were substantially completed during 2024.
Overview Our portfolio consists of office properties located within identified growth submarkets in large metropolitan cities concentrated primarily in the Sunbelt. We typically lease space to creditworthy corporate or governmental tenants on a long-term basis. As of December 31, 2023, our average lease was approximately 15,000 square feet with approximately six years of lease term remaining.
We typically lease space to creditworthy corporate or governmental tenants on a long-term basis. As of December 31, 2024, our average lease was approximately 14,000 square feet with six years of lease term remaining.
During the year ended December 31, 2023, we 43 Table of Contents Index to Financial Statements experienced a 4.7% and 12.4% roll up in cash and accrual rents, respectively, on executed leases related to space vacant one year or less.
During the year ended December 31, 2024, we experienced a 11.9% and 18.9% roll up in cash and accrual rents, respectively, on executed leases related to space vacant one year or less. 43 Table of Contents Index to Financial Statements During the year ended December 31, 2024, Same Store NOI increased by 2.6% and 1.6% on a cash and accrual basis, respectively, as newly commenced leases or those with expiring abatements outweighed expiring leases.
Other Income (Expense) Interest expense increased approximately $35.6 million for the year ended December 31, 2023 as compared to the prior year primarily driven by increased interest rates on floating-rate debt during 2023 and on $600 million of refinanced fixed-rate debt, also obtained in 2023.
Other Income (Expense) Interest expense increased approximately $21.7 million for the year ended December 31, 2024 as compared to the prior year primarily driven by increased interest rates on floating-rate debt during the year ended December 31, 2024 as well as refinancing $1.2 billion of maturing debt at higher rates during the latter half of 2023 and first half of 2024.
Election as a REIT We have elected to be taxed as a REIT under the Code and have operated as such beginning with our taxable year ended December 31, 1998.
Same Store NOI comparisons for any given period fluctuate as a result of the mix of net leasing activity in individual properties during the respective period. Election as a REIT We have elected to be taxed as a REIT under the Code and have operated as such beginning with our taxable year ended December 31, 1998.
The nature and timing of any additional sources of capital will be highly dependent on market conditions. We believe that we have sufficient liquidity to meet our obligations for the foreseeable future. Our most consistent use of capital has historically been, and we believe will continue to be, to fund capital expenditures for our existing portfolio of properties.
Our most consistent use of capital has historically been, and we believe will continue to be, to fund capital expenditures for our existing portfolio of properties.
Other property related income increased approximately $4.3 million for the year ended December 31, 2023 as compared to the prior year primarily due to higher transient parking at our buildings during the current year.
Other property related income increased approximately $3.8 million for the year ended December 31, 2024 as compared to the prior year primarily due to increased occupancy and utilization at our properties and higher transient parking at our office projects during the current period, as compared to the prior period. 35 Table of Contents Index to Financial Statements Expense Property operating costs decreased approximately $1.0 million for the year ended December 31, 2024 as compared to the prior year.
Boston NOI decreased primarily due to the disposition of the 225 and 235 Presidential Way assets in January 2022 and the disposition of the Cambridge Portfolio in December 2022. 38 Table of Contents Index to Financial Statements Funds From Operations ("FFO"), Core Funds From Operations ("Core FFO"), and Adjusted Funds From Operations (“AFFO”) Net income/(loss) calculated in accordance with GAAP is the starting point for calculating FFO, Core FFO, and AFFO.
Boston NOI increased during the year ended December 31, 2024 as compared to the prior year due to a tenant's expansion at our Wayside Office Park project in the latter half of 2023. 38 Table of Contents Index to Financial Statements Funds From Operations ("FFO"), Core Funds From Operations ("Core FFO"), and Adjusted Funds From Operations (“AFFO”) Net income/(loss) calculated in accordance with GAAP is the starting point for calculating FFO, Core FFO, and AFFO.
Leased Percentage The leased percentage of our portfolio increased approximately 40 basis points during the year ended December 31, 2023, from 86.7% leased as of December 31, 2022 to 87.1% leased as of December 31, 2023.
Leased Percentage The leased percentage of our in-service portfolio increased to 88.4% leased as of December 31, 2024, from 87.1% leased as of December 31, 2023.
The variance was primarily due to higher recoverable operating expenses such as janitorial, security, and utilities resulting from higher tenant utilization during the current period, and capital recycling activity during the year ended December 31, 2022. Depreciation expense increased approximately $14.8 million for the year ended December 31, 2023 compared to the prior year.
These decreased costs were partially offset by higher recoverable operating expenses such as janitorial, security, repairs and maintenance and other general expenses as tenant utilization increased during the year ended December 31, 2024. Depreciation expense increased approximately $8.5 million for the year ended December 31, 2024 compared to the prior year.
The following table presents accrual-basis NOI by geographic segment (in thousands): Years Ended December 31, 2023 2022 Atlanta $ 103,475 $ 82,878 Dallas 64,566 62,444 Orlando 36,639 35,327 Northern Virginia/Washington, D.C. 36,334 39,994 Minneapolis 33,302 31,886 New York 29,357 31,252 Boston 25,703 39,101 Total reportable segments 329,376 322,882 Other 12,969 14,685 Total NOI $ 342,345 $ 337,567 Comparison of the Year Ended December 31, 2023 Versus the Year Ended December 31, 2022 Atlanta NOI increased primarily due to the acquisition of 1180 Peachtree Street during the third quarter of 2022.
The following table presents accrual-basis NOI by geographic segment (in thousands): Years Ended December 31, 2024 2023 Atlanta $ 110,715 $ 103,474 Dallas 62,332 64,566 Orlando 33,860 36,639 Northern Virginia/Washington, D.C. 34,086 36,333 Minneapolis 23,553 33,302 New York 30,200 29,357 Boston 28,296 25,705 Total reportable segments 323,042 329,376 Other 12,498 12,969 Total NOI $ 335,540 $ 342,345 Comparison of the Year Ended December 31, 2024 Versus the Year Ended December 31, 2023 Atlanta NOI increased due to several large leases commencing at our Galleria on the Park and 999 Peachtree Street projects during the year ended December 31, 2024 as compared to the same period in the prior year.
(3) Includes potential dilution under the treasury stock method that would occur if our remaining unvested and potential stock awards vested and resulted in additional common shares outstanding.
(2) Includes potential dilution under the treasury stock method that would occur if our remaining unvested and potential stock awards vested and resulted in additional common shares outstanding. Such shares are not included when calculating net loss per share applicable to Piedmont for the years ended December 31, 2024 and 2023 as they would reduce the loss per share presented.
The increase was attributable to the completion of approximately 830,000 of new tenant leases during the year ended December 31, 2023, representing the largest annual amount of new tenant leasing since 2018. Additionally, we renewed approximately 1.4 million square feet of expiring leases, resulting in approximately 2.2 million square feet of total leasing for the year ended December 31, 2023.
During the year ended December 31, 2024, we completed approximately 2.4 million square feet of leasing, including approximately a million square feet of new tenant leases which contributed to the increase in our in-service leased percentage as compared to December 31, 2023.
During the year ended December 31, 2022, we also recognized a non-cash impairment loss on real estate assets of approximately $10.0 million related to a change in hold period assumptions for one of our Minneapolis properties.
The decrease in amortization expense is associated with certain lease intangible assets at our existing projects becoming fully amortized subsequent to January 1, 2023. During the year ended December 31, 2024, we recognized a non-cash impairment charge of approximately $33.8 million related to a change in hold period assumptions at certain properties in our portfolio.
During the years ended December 31, 2023 and 2022, we reduced the carrying amount of goodwill resulting in the recognition of non-cash impairment charges of approximately $29.4 million and $16.0 millions, respectively. See Note 6 to our accompanying consolidated financial statements for further details.
Two of these projects, the One Lincoln Park building and 750 West John Carpenter Freeway building were subsequently sold during the year ended December 31, 2024. During the year ended December 31, 2023, we reduced the carrying amount of goodwill resulting in the recognition of non-cash impairment charges of approximately $29.4 million.
Such shares are not included when calculating net loss per diluted share applicable to Piedmont for the years ended December 31, 2023 and 2021 as they would reduce the loss per share presented. 40 Table of Contents Index to Financial Statements Property and Same Store Net Operating Income Property Net Operating Income ("Property NOI") is a non-GAAP measure which we use to assess our operating results.
Approximately $0.17 of the decrease is due to increased interest expense, net of interest income, with the remaining decrease attributable to a combination of the sale of two properties during 2024, as well as downtime between the expiration of a few large leases during the year ended December 31, 2024, before newly executed leases commence. 40 Table of Contents Index to Financial Statements Property and Same Store Net Operating Income Property Net Operating Income ("Property NOI") is a non-GAAP measure which we use to assess our operating results.
Northern Virginia/Washington, D.C. NOI decreased due to the termination of certain leases at Arlington Gateway in late 2022.
The entire building has been re-leased to another tenant; however, the new lease is not expected to commence until late 2025. Northern Virginia/Washington, D.C. NOI decreased primarily due to the termination of two leases at the Arlington Gateway project during the year ended December 31, 2024, as compared to the same period in the prior year.
Removed
As a result of refinancing activity completed in January 2024 (see Note 3 to our accompanying consolidated financial statements), our only remaining 2024 debt maturity is the $50.2 million outstanding balance of our $400 Million Unsecured Senior Notes due in March 2024, which we intend to repay using our $600 Million Unsecured 2022 Line of Credit.
Added
On February 13, 2025, we amended our $200 Million Unsecured 2024 Term Loan to increase the principal amount of the loan by $125 million to a total of $325 million principal amount outstanding and to add two six-month extension options for a final maturity date of January 29, 2028, provided that we are not then in default and upon payment of extension fees.
Removed
Our 2025 debt maturities are the remaining $25 million of our $215 Million Unsecured 2023 Term Loan due in January 2025 and the $250 Million Unsecured 2018 Term Loan due in March 2025.
Added
The net proceeds from the increased principal and our $600 Million Unsecured 2022 Line of Credit, along with cash on hand, were used to repay our $250 Million Unsecured 2018 Term Loan that was scheduled to mature in March of 2025.
Removed
We currently anticipate repaying these amounts using any or a combination of following: our $600 Million Unsecured 2022 Line of Credit, net proceeds from the disposition of select properties, and other new secured or unsecured borrowings from third party lenders or the public debt market.
Added
Also subsequent to December 31, 2024, Piedmont recast the $600 Million Unsecured 2022 Line of Credit to extend the maturity date to June 30, 2028, with two additional one-year extension options, for a final maturity date of June 30, 2030, provided that we are not then in default and upon payment of extension fees.
Removed
Given the significant increase in interest expense during the year ended December 31, 2023 (see Results of Operations below), we reduced our annual dividend from $0.84 per share to $0.50 per share beginning with the third quarter of 2023 which will reduce the cash used to pay the dividend by approximately $40 million on an annual basis.
Added
Consequently, we currently have no debt with a final maturity until 2028; however, as part of our overall debt management strategies, we may seek other new secured or unsecured borrowings from third party lenders or issue other debt or equity securities as additional sources of capital.
Removed
The decrease in net income reflects: (i) a decreased gain on sale of real estate assets of $149.8 million; (ii) a $35.6 million increase in interest expense in the current period compared to the prior period primarily due to higher interest rates; (iii) and a $14.8 million increase in depreciation expense due to additional building and tenant improvements acquired and/or placed in service over the two year period.
Added
The nature and timing of these additional sources of capital will be highly dependent on market conditions. As of the date of this filing we had approximately $500 million of capacity available under our $600 Million Unsecured 2022 Line of Credit, and we believe that we have sufficient liquidity to meet our obligations for the foreseeable future.
Removed
These decreases were partially offset by continued growth in Property Net Operating Income during the year ended December 31, 2023, as compared to the year ended December 31, 2022. Comparison of the accompanying consolidated statements of operations for the year ended December 31, 2023 vs. the year ended December 31, 2022.
Added
Additionally, although we have no final debt maturity until 2028, we may use capital to repay debt obligations when we deem it prudent to refinance or reduce various obligations. We also use capital resources to pay dividends to our stockholders.
Removed
The increase was primarily due to capital recycling activity during the year ended December 31, 2022 and higher tenant reimbursements as a result of higher recoverable operating expenses during the current year as tenant utilization of our buildings increased during 2023 as compared to the prior year.
Added
The increase in net loss reflects increased interest expense, net of interest income, as compared to the prior year, as well as the sale of two properties and downtime between the expiration of a few large leases during the year ended December 31, 2024, before newly executed leases commence.
Removed
Additionally, parking revenue associated with the 1180 Peachtree Street building acquired during the third quarter of 2022 also contributed to the increase. 35 Table of Contents Index to Financial Statements Expense Property operating costs increased approximately $9.0 million for the year ended December 31, 2023 as compared to the prior year.
Added
Additionally, we recognized approximately $4.8 million of executive separation costs during the year ended December 31, 2024. Comparison of the accompanying consolidated statements of operations for the year ended December 31, 2024 vs. the year ended December 31, 2023.
Removed
The decrease in amortization expense associated with certain lease intangible assets at our existing properties becoming fully amortized subsequent to January 1, 2022 was largely offset by additional amortization associated with the acquisition of 1180 Peachtree Street mentioned above, as well as accelerated amortization associated with lease terminations.
Added
The decrease was primarily due to lost revenues during the downtime between certain large tenant expirations and the commencement or abatement expiration associated with recently executed leases, as well as the disposition of two properties in 2024.
Removed
Other income increased approximately $1.2 million for the year ended December 31, 2023 as compared to the prior year due primarily to interest income earned on cash invested for short periods pending the repayment of debt; consequently, we do not expect such interest income to recur in future periods.
Added
The impact of these decreases is partially offset by the roll up of rental rates and new leases commencing during the year ended December 31, 2024.
Removed
The loss on early extinguishment of debt for the year ended December 31, 2023 is comprised of the pro-rata write-off of unamortized debt issuance costs and discounts associated with the early repurchase of approximately $350 million aggregate principal amount of the $400 Million Unsecured Senior Notes due 2024, as well as fees paid.
Added
The variance was primarily due to a decrease in property operating expenses associated with the sale of two properties in 2024 as well as lower property taxes associated with favorable tax assessments.
Removed
See Note 3 to our accompanying consolidated financial statements for further details.
Added
See Note 6 to our accompanying consolidated financial statements for further details. General and administrative expense increased approximately $6.2 million for the year ended December 31, 2024 compared to the prior year, primarily as the result of recognizing approximately $4.8 million of executive separation costs that occurred during the fourth quarter of 2024.
Removed
Gain on sale of real estate assets during the year ended December 31, 2022 includes $49.2 million of gain recognized on the sale of the 225 & 235 Presidential Way buildings, which closed in January 2022, as well as $102.5 million of gain recognized on the sale of the Cambridge Portfolio in December 2022.
Added
The remainder of the increase primarily reflects increased accruals for potential performance-based compensation, largely associated with successful leasing during the year ended 2024.
Removed
Results of Operations (2022 vs. 2021) Please refer to "Item 7.
Added
The increase was partially offset by a $5.9 million increase in capitalized interest associated with various redevelopment projects in progress during the year ended December 31, 2024. Results of Operations (2023 vs. 2022) Please refer to "Item 7.
Removed
(2) We define non-incremental capital expenditures as capital expenditures of a recurring nature related to tenant improvements, leasing commissions, and building capital that do not incrementally enhance the underlying assets' income generating capacity.
Added
Dallas NOI decreased due to the sales of the One Lincoln Park and 750 West John Carpenter Freeway assets during the year ended December 31, 2024, as compared to the same period in the prior year. Orlando NOI decreased primarily due to the expiration of the lease associated with the sole tenant at 501 West Church.
Removed
(5) Dispositions include Two Pierce Place in Itasca, Illinois and 225 and 235 Presidential Way in Woburn, Massachusetts, all sold during the first quarter of 2022, and One Brattle Square and 1414 Massachusetts Avenue in Cambridge, Massachusetts, sold in the fourth quarter of 2022.
Added
Minneapolis NOI decreased primarily due to the expiration of the leases associated with the sole tenants at two projects: 9320 Excelsior Boulevard and Meridian. Both projects have been designated as redevelopment assets during the year ended December 31, 2024.
Removed
(6) Other investments consist of active redevelopment and development projects, land, and recently completed redevelopment and development projects for which some portion of operating expenses were capitalized during the current and/or prior year reporting periods. The operating results from 222 South Orange Avenue in Florida are included in this line item.
Added
(3) Core FFO was $1.49 per diluted share for the year ended December 31, 2024, as compared to $1.74 per diluted share for the year ended December 31, 2023.
Removed
Scheduled lease expirations for 2024 represent approximately 1.2 million square feet, or 7.4% of our ALR, some portion of which may renew. Our historical retention rate is approximately 68% over the past five years.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

9 edited+4 added−6 removed3 unchanged
Biggest changeAs of December 31, 2023, our consolidated principal outstanding for aggregate debt maturities consisted of the following (in thousands): 2024 2025 2026 2027 2028 Thereafter Total Maturing debt: Variable rate repayments $ 315,000 (2) $ — $ 59,000 (4) $ — $ — $ — $ 374,000 Variable rate average interest rate (1) 6.71 % — % 6.45 % — % — % — % 6.67 % Fixed rate repayments $ 53,317 $ 253,588 (3) $ 3,738 $ 3,895 $ 781,495 $ 600,000 $ 1,696,033 Fixed rate average interest rate (1) 4.43 % 4.78 % 4.10 % 4.10 % 8.05 % 2.95 % 5.63 % (1) See Note 3 to our accompanying consolidated financial statements for further details on our debt structure.
Biggest changeAs of December 31, 2024, our consolidated principal outstanding for aggregate debt maturities consisted of the following (in thousands): 2025 2026 2027 2028 2029 Thereafter Total Maturing debt: Variable rate repayments $ — $ — $ 200,000 (1) $ — $ — $ — $ 200,000 Variable rate average interest rate (2) — % — % 5.41 % (1) — % — % — % 5.41 % Fixed rate repayments $ 253,295 (3) $ 3,738 $ 3,895 $ 781,495 $ 400,000 $ 600,000 $ 2,042,423 Fixed rate average interest rate (2) 4.78 % 4.10 % 4.10 % 8.05 % 6.88 % 2.95 % 5.90 % (1) The $200 Million Unsecured 2024 Term Loan has a stated variable rate; however, Piedmont's interest rate swap agreements as of December 31, 2024 effectively fixed, exclusive of changes to Piedmont's credit rating, the full principal balance to 5.41% through February 1, 2026, approximately one year before the maturity date of the loan.
A change in the market interest rate impacts the net financial instrument position of our fixed-rate debt portfolio but has no impact on interest incurred or cash flows for that portfolio. As of December 31, 2023, we had a $59.0 million outstanding balance on our $600 Million Unsecured 2022 Line of Credit.
A change in the market interest rate impacts the net financial instrument position of our fixed-rate debt portfolio but has no impact on interest incurred or cash flows for that portfolio. As of December 31, 2024, our $600 Million Unsecured 2022 Line of Credit had no amounts outstanding, which is the only facility subject to a variable interest rate.
As of December 31, 2023, our potential for exposure to market risk includes interest rate fluctuations in connection with borrowings under our $600 Million Unsecured 2022 Line of Credit, the remaining $100 million outstanding on the $200 Million 2022 Unsecured Term Loan Facility, and the $215 Million Unsecured 2023 Term Loan.
As of December 31, 2024, our potential for exposure to market risk includes interest rate fluctuations in connection with any future borrowings under our $600 Million Unsecured 2022 Line of Credit and unhedged amounts outstanding on our $200 Million Unsecured 2024 Term Loan after February 1, 2026.
See Note 3 to our accompanying consolidated financial statements for more details. (3) Includes the $250 Million Unsecured 2018 Term Loan.
(2) See Note 3 to our accompanying consolidated financial statements for further details on our debt structure. (3) Includes the $250 Million Unsecured 2018 Term Loan, which was repaid on February 13, 2025.
Our interest rate swap agreements in place as of December 31, 2023 and December 31, 2022, respectively, carried a notional amount of $250 million and a weighted-average fixed interest rate of 3.49%, exclusive of our corporate credit rating spread.
Our interest rate swap agreements in place as of December 31, 2024 carried a notional amount of $450 million and a weighted-average fixed interest rate of 5.07%, and our interest swap agreements as of December 31, 2023 carried a notional amount totaling $250 million with a weighted-average fixed interest rate of 4.79%.
We do not enter into derivative or interest rate transactions for speculative purposes, as such all of our debt and derivative instruments were entered into for purposes other than trading purposes. Our financial instruments consist of both fixed and variable-rate debt.
As such, all of our debt as of December 31, 2024 is currently based on fixed or effectively-fixed interest rates to hedge against volatility in the credit markets. We do not enter into derivative or interest rate transactions for speculative purposes, as such all of our debt and derivative instruments were entered into for purposes other than trading purposes.
Our $215 Million Unsecured 2023 Term Loan had a stated rate of Adjusted SOFR plus 1.30% per annum (based on our current corporate credit rating), resulting in a total interest rate of 6.71%.To the extent that we borrow funds in the future under the $600 Million Unsecured 2022 Line of Credit or potential future variable-rate lines of credit, we would have exposure to increases in interest rates, which would potentially increase our cost of debt.
To the extent that we borrow additional funds in the future under the $600 Million Unsecured 2022 Line of Credit or potential future variable-rate debt facilities, we would have exposure to increases in interest rates, which would potentially increase our cost of debt.
The estimated fair value of our debt above as of December 31, 2023 and 2022 was approximately $2.0 billion and $1.8 billion, respectively.
As of December 31, 2024, the facility has a stated variable rate; however, Piedmont's interest rate swap agreements effectively fixed the full principal balance to 4.79% through the schedule maturity date of the loan. The estimated fair value of our debt above as of December 31, 2024 and 2023 was approximately $2.2 billion and $2.0 billion, respectively.
As of December 31, 2023, our total outstanding debt subject to fixed, or effectively fixed, interest rates totaling approximately $1.7 billion has an average effective interest rate of approximately 5.63% per annum with expirations ranging from 2024 to 2032.
As of December 31, 2024, our total outstanding debt subject to fixed, or effectively fixed, interest rates totaling approximately $2.2 billion has an average effective interest rate of approximately 6.01% per annum with expirations ranging from 2025 to 46 Table of Contents Index to Financial Statements 2032; however, on February 13, 2025, we repaid the $250 Million Unsecured 2018 Term Loan and amended the $200 Million Unsecured 2024 Term Loan and recast the $600 Million Unsecured 2022 Line of Credit to extend our maturity schedule with expirations ranging from 2028 to 2032, assuming certain extension options are exercised.
Removed
As such, all of our debt as of December 31, 2023, other than those variable rate facilities mentioned above, is currently based on fixed or effectively-fixed interest rates to hedge against volatility in the credit markets.
Added
Our financial instruments consist of both fixed and variable-rate debt.
Removed
(2) Includes a balance of $100 million on the $200 Million Unsecured Term Loan Facility which was repaid on January 30, 2024. Also includes the $215 Million Unsecured 2023 Term Loan, $190 million of which was repaid on January 30, 2024, with the remaining $25 million extended to January 31, 2025.
Added
Upon expiration of the interest rate swap agreements, the interest rate will be calculated as adjusted SOFR, plus 1.30%.
Removed
The facility has a stated variable rate; however, Piedmont's interest rate swap agreements as of December 31, 2023 effectively fix, exclusive of changes to Piedmont's credit rating, the full principal balance to 4.79% through the maturity date of the loan. 46 Table of Contents Index to Financial Statements (4) Piedmont may extend the term for up to one additional year (through two available six month extensions to a final extended maturity date of June 30, 2027) provided Piedmont is not in default and upon payment of extension fees.
Added
On February 13, 2025, Piedmont amended the $200 Million Unsecured 2024 Term Loan to increase the principal amount of the loan by $125 million to a total of $325 million principal amount outstanding and to add two six-month extension options for a final maturity date of January 29, 2028, provided that we are not then in default and upon payment of extension fees.
Removed
Our $600 Million Unsecured 2022 Line of Credit currently has a stated rate of Adjusted SOFR plus 1.04% per annum (based on our current corporate credit rating), resulting in a total interest rate of 6.45%.
Added
On February 13, 2025, we terminated eight interest rate swap agreements with a total notional value of $250 million in conjunction with the repayment of the $250 Million Unsecured 2018 Term Loan.
Removed
Our $200 Million Unsecured Term Loan Facility had a stated rate of Adjusted SOFR plus 1.25% per annum (based on our current corporate credit rating), resulting in a total interest rate of 6.70%.
Removed
Additionally, a 1.0% increase in variable interest rates on our outstanding borrowings as of December 31, 2023 would increase interest expense approximately $3.7 million on a per annum basis.

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