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What changed in Piedmont Realty Trust, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Piedmont Realty Trust, Inc.'s 2024 and 2025 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 2025 report.

+181 added−197 removedSource: 10-K (2026-02-17) vs 10-K (2025-02-19)

Top changes in Piedmont Realty Trust, Inc.'s 2025 10-K

181 paragraphs added · 197 removed · 152 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeFurther details concerning Piedmont's environmental and climate risk management strategy and programs can be found in our annual ESG report located on our website, www.piedmontreit.com under the "ESG" section.
Biggest changeWe also closely engage with our tenants regarding our environmental initiatives and encourage them to partner with us to reduce energy use within their leased spaces. Further details concerning Piedmont's environmental and climate risk management strategy and programs can be found in our annual Corporate Responsibility report located on our website, www.piedmontreit.com under the "Corporate Responsibility" section.
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.
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 distributed over multiple 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.
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.
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 65% tenant retention rate over the past five years. In addition to operational excellence, we also focus on environmental sustainability initiatives at our properties.
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.
Training programs for our employees, managers, and contractors during 2025 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.
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 Corporate Responsibility report located on our website, www.piedmontreit.com under the "Corporate Responsibility" section. The information contained on our website is not incorporated herein by reference.
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.
Segment Information As of December 31, 2025, 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 13 , Segment Information, to the accompanying consolidated financial statements.
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.
Human Capital and Social Involvement As of December 31, 2025, we had 140 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 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.
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.
ITEM 1. BUSINESS General Piedmont Office Realty Trust, Inc.
ITEM 1. BUSINESS General Piedmont Realty Trust, Inc.
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.
As of December 31, 2025, projects representing approximately 99% of our in-service 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.
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.
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, 7 Table of Contents Index to Financial Statements affects the rental rates and concessions that we negotiate with our tenants.
During 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.
During 2025, we: • were recognized as an ENERGY STAR Partner of the year for the fifth consecutive year; • achieved a maximum five star designation and “Green Star” recognition with scores ranking in the top decile of all participating listed U.S. companies from the GRESB Real Estate Assessment; and • continued to be recognized as a Green Lease Leader by the Institute for Market Transformation and the U.S.
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.
As of December 31, 2025, our tenants come from broadly diversified industry sectors and no single 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.
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.
Collectively, over 70% of our ALR is generated from our properties located in our Sunbelt markets. 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, 2025.
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.
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. No single tenant accounts for more than 5% of our ALR.
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.
Financing Strategy We operate with a leverage strategy that supports our investment grade unsecured debt ratings with target leverage metrics between 30% to 40%, and net debt to EBITDA ratio of mid 6x or below.
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.
Department of Energy’s Better Buildings Alliance. As of December 31, 2025, approximately 83% and 74% of our portfolio was ENERGY STAR rated and Leadership in Energy and Environmental Design ("LEED") certified, respectively, and 63% of our portfolio was certified LEED gold.
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.
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 Piedmont is a fully integrated, self-managed real estate investment company focused on delivering an exceptional office environment.
Removed
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.
Added
As an owner, manager, developer and operator of approximately 16 million square feet (unaudited) of Class A properties across major U.S. Sunbelt markets, we are known for our hospitality-driven approach and commitment to transforming buildings into premier “Piedmont PLACEs” that enhance each client’s workplace experience.
Removed
We also closely engage with our tenants regarding our environmental initiatives and encourage them to partner with us to reduce energy use within their leased spaces.
Added
As of December 31, 2025, we owned and operated a portfolio of 29 in-service projects and three redevelopment projects. The in-service office projects totaled approximately 14.9 million square feet (unaudited) and were 89.6% leased. Our redevelopment projects were approximately 62% leased as of December 31, 2025.
Removed
As our environmental programs have been ongoing for several years under the coordinated supervision of our National Vice President of Sustainability, we currently do not anticipate incurring any unusually large or material capital expenditures within any given year in order to meet these goals.
Removed
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.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThese practices enable businesses to reduce their space requirements, thereby eroding demand for commercial office space and, in turn, placing downward pressure on occupancy, rental rates and property valuations. We depend on tenants for our revenue, and accordingly, lease terminations or tenant defaults, particularly by one of our significant lead tenants, could adversely affect the income produced by our properties.
Biggest changeWe may be adversely affected by trends in the office real estate industry. Many businesses utilize remote work and flexible work arrangements as well as open workspaces and “co-working” spaces. These practices enable businesses to reduce their space requirements, thereby eroding demand for commercial office space and, in turn, placing downward pressure on occupancy, rental rates and property valuations.
Such joint venture investments involve risks not otherwise present in a wholly-owned property, development, or redevelopment project, including the following: • in these investments, we may not have exclusive control over the development, financing, leasing, management, and other aspects of the project, which may prevent us from taking actions that are opposed by our joint venture partners; • joint venture agreements often restrict the transfer of a co-venturer’s interest or may otherwise restrict our ability to sell the interest when we desire or on advantageous terms; • we may not be in a position to exercise sole decision-making authority regarding the property or joint venture, which could create the potential risk of creating impasses on decisions, such as acquisitions or sales; 15 Table of Contents Index to Financial Statements • such co-venturer may, at any time, have economic or business interests or goals that are, or that may become, inconsistent with our business interests or goals; • such co-venturer may be in a position to take action contrary to our instructions, requests, policies or objectives, including our current policy with respect to maintaining our qualification as a REIT; • the possibility that our co-venturer in an investment might become bankrupt, which would mean that we and any other remaining co-venturers would generally remain liable for the joint venture’s liabilities; • our relationships with our co-venturers are contractual in nature and may be terminated or dissolved under the terms of the applicable joint venture agreements and, in such event, we may not continue to own or operate the interests or assets underlying such relationship or may need to purchase such interests or assets at a premium to the market price to continue ownership; • disputes between us and our co-venturers may result in litigation or arbitration that would increase our expenses and prevent our officers and board of directors from focusing their time and efforts on our business and could result in subjecting the properties owned by the applicable joint venture to additional risk; or • we may, in certain circumstances, be liable for the actions of our co-venturers, and the activities of a joint venture could adversely affect our ability to qualify as a REIT, even though we do not control the joint venture.
Such joint venture investments involve risks not otherwise present in a wholly-owned property, development, or redevelopment project, including the following: • in these investments, we may not have exclusive control over the development, financing, leasing, management, and other aspects of the project, which may prevent us from taking actions that are opposed by our joint venture partners; • joint venture agreements often restrict the transfer of a co-venturer’s interest or may otherwise restrict our ability to sell the interest when we desire or on advantageous terms; • we may not be in a position to exercise sole decision-making authority regarding the property or joint venture, which could create the potential risk of creating impasses on decisions, such as acquisitions or sales; • such co-venturer may, at any time, have economic or business interests or goals that are, or that may become, inconsistent with our business interests or goals; • such co-venturer may be in a position to take action contrary to our instructions, requests, policies or objectives, including our current policy with respect to maintaining our qualification as a REIT; • the possibility that our co-venturer in an investment might become bankrupt, which would mean that we and any other remaining co-venturers would generally remain liable for the joint venture’s liabilities; • our relationships with our co-venturers are contractual in nature and may be terminated or dissolved under the terms of the applicable joint venture agreements and, in such event, we may not continue to own or operate the interests or assets underlying such relationship or may need to purchase such interests or assets at a premium to the market price to continue ownership; 15 Table of Contents Index to Financial Statements • disputes between us and our co-venturers may result in litigation or arbitration that would increase our expenses and prevent our officers and board of directors from focusing their time and efforts on our business and could result in subjecting the properties owned by the applicable joint venture to additional risk; or • we may, in certain circumstances, be liable for the actions of our co-venturers, and the activities of a joint venture could adversely affect our ability to qualify as a REIT, even though we do not control the joint venture.
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. 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.
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. artificial intelligence and machine learning, 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.
In addition, periods of economic slowdown or recession, rising interest rates, or declining demand for real estate could result in a general decrease in rents or an increased occurrence of defaults under existing leases, which would adversely affect our financial condition and results of operations.
In addition, periods of economic slowdown or recession, fluctuating or rising interest rates, or declining demand for real estate could result in a general decrease in rents or an increased occurrence of defaults under existing leases, which would adversely affect our financial condition and results of operations.
Currently, any outstanding draws on our $600 Million Unsecured 2022 Line of Credit and our variable-rate debt instruments which are not subject to hedging under interest rate swap agreements represent our exposure to interest rate changes. In addition, any outstanding draws under the $600 Million Unsecured 2022 Line of Credit are subject to Adjusted SOFR locks of various length.
Currently, any outstanding draws on our $600 Million Unsecured 2022 Line of Credit and our variable-rate debt instruments which are not subject to hedging under interest rate swap agreements represent our exposure to interest rate changes. In addition, any outstanding draws under the $600 Million Unsecured 2022 Line of Credit are subject to SOFR locks of various length.
Even the most well protected information, networks, systems and facilities remain potentially vulnerable because the techniques used in such attempted security breaches evolve and generally are not recognized until launched against a target, and in some cases are designed to not be detected.
Even the most well protected information, networks, systems and facilities remain potentially vulnerable because the techniques used in such attempted security breaches evolve and generally are not recognized until launched against a target, and in most cases are designed to not be detected.
Dividends paid by REITs, however, (other than distributions we properly designate as capital gain dividends or as qualified dividend income) are taxed at the normal income tax rate applicable to the individual recipient (currently a maximum rate of 37%) rather than the 20% preferential rate, subject to a deduction equal to 20% of the amount of certain “qualified REIT dividends” (generally, dividends received by a REIT stockholder that are not designated as capital gain dividends or qualified dividend income) that is available to noncorporate taxpayers through 2025, which has the effect of reducing the maximum effective income tax rate on qualified REIT dividends to 29.6%.
Dividends paid by REITs, however, (other than distributions we properly designate as capital gain dividends or as qualified dividend income) are taxed at the normal income tax rate applicable to the individual recipient (currently a maximum rate of 37%) rather than the 20% preferential rate, subject to a deduction equal to 20% of the amount of certain “qualified REIT dividends” (generally, dividends received by a REIT stockholder that are not designated as capital gain dividends or qualified dividend income) that is available to noncorporate taxpayers, which has the effect of reducing the maximum effective income tax rate on qualified REIT dividends to 29.6%.
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.
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, 2025.
Although we believe that our properties are currently in material compliance with these regulatory requirements, we have not conducted an audit or investigation of all of our properties to determine our compliance, and we cannot predict the ultimate cost of compliance. Any material expenditures, liabilities, fines, or damages we must pay will reduce our net income and cash flows.
Although we believe that our properties are currently in material compliance with these regulatory requirements, we have not conducted an audit or investigation of all of our properties to determine our compliance, and we cannot predict the ultimate cost of compliance. Any material expenditures, liabilities, fines, or damages we must pay will reduce our earnings and cash flows.
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.
If any of the credit rating agencies that have rated us, Piedmont OP 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 Piedmont OP'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.
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.
Some of the factors that could negatively 24 Table of Contents Index to Financial Statements 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, Piedmont OP 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.
Our charter and bylaws require us to indemnify our board of directors and officers to the maximum extent permitted by Maryland law for any claim or liability to which they may become subject or which they may incur by reason of their service as members of the board of directors or officers, except to the extent that the act or omission of the director or officer was material to the matter giving rise to the proceeding and was committed in bad faith or was the result of active and deliberate dishonesty, the director or officer actually received an improper personal benefit in money, property, or services, or, in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful.
Our charter and bylaws require us to indemnify our board of directors and officers to the maximum extent permitted by Maryland law for any claim or liability to which they may become subject or which they may incur by reason of their service as members of the board of directors or officers, except to the extent that the act or omission of the director or officer was material to the matter giving rise to the proceeding and was committed in bad faith or was the result of active and deliberate dishonesty, the director or officer actually received an improper personal benefit in money, property, or services, or, 19 Table of Contents Index to Financial Statements in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful.
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.
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, over 70% of our ALR is generated from our properties located in our Sunbelt markets as of December 31, 2025.
Rising interest rates may make it difficult for us to finance or refinance properties, which could reduce the number of properties we can acquire, our net income, and the amount of cash distributions we can make. If debt financing is unavailable at reasonable rates, we may not be able to finance the purchase of properties.
Fluctuating or rising interest rates may make it difficult for us to finance or refinance properties, which could reduce the number of properties we can acquire, our earnings, and the amount of cash distributions we can make. If debt financing is unavailable at reasonable rates, we may not be able to finance the purchase of properties.
Any of the above might subject a property to liabilities in excess of those contemplated and thus reduce the returns to our investors. Costs of complying with governmental laws and regulations may reduce our net income and cash flows.
Any of the above might subject a property to liabilities in excess of those contemplated and thus reduce the returns to our investors. Costs of complying with governmental laws and regulations may reduce our earnings and cash flows.
If such changes occur, we may be required to pay additional taxes on our assets or income. These increased tax costs could adversely affect our financial condition and results of operations and the amount of cash available for distributions to our stockholders. 22 Table of Contents Index to Financial Statements Property taxes may decrease returns on real estate.
If such changes occur, we may be required to pay additional taxes on our assets or income. These increased tax costs could adversely affect our financial condition and results of operations and the amount of cash available for distributions to our stockholders. Property taxes may decrease returns on real estate.
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.
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 attempted security breaches or disruptions would not be successful or damaging.
If one or more of these analysts ceases coverage of our company, we could lose attention in the market, which in turn could cause the price of our common stock to decline. The failure of any bank in which we deposit our funds could reduce the amount of cash we have available to pay distributions and make additional investments.
If one or more of these analysts ceases coverage of our company, we could lose attention in the market, which in turn could cause the price of our common stock to decline. 25 Table of Contents Index to Financial Statements The failure of any bank in which we deposit our funds could reduce the amount of cash we have available to pay distributions and make additional investments.
The credit ratings assigned to us, to the Operating Partnership and to our and their unsecured debt securities could change based upon, among other things, our results of operations and financial condition.
The credit ratings assigned to us, to Piedmont OP and to our and their unsecured debt securities could change based upon, among other things, our results of operations and financial condition.
As a result, these provisions currently will not apply to a business combination or 19 Table of Contents Index to Financial Statements control share acquisition involving our company. However, our board of directors still has the ability to opt into the business combination provisions and the control share provisions of Maryland law in the future.
As a result, these provisions currently will not apply to a business combination or control share acquisition involving our company. However, our board of directors still has the ability to opt into the business combination provisions and the control share provisions of Maryland law in the future.
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.
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, 2025, we had total outstanding indebtedness of approximately $2.2 billion, including $188.8 million of mortgage debt.
Furthermore, if one or more of the analysts who do cover us downgrades our shares or our industry, or the stock of any of our competitors, the price of our shares could decline.
We do not control these analysts. Furthermore, if one or more of the analysts who do cover us downgrades our shares or our industry, or the stock of any of our competitors, the price of our shares could decline.
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.
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 Future terrorist attacks, armed hostilities, or civil unrest in the major metropolitan areas in which we own properties could significantly impact the demand for, and value of, our properties.
The cost of defending against claims of liability, of remediating any contaminated property, or of paying personal injury claims could reduce our net income and cash flows. We could become subject to liability for adverse environmental conditions in the buildings on our property. Some of our properties have building materials that contain asbestos.
The cost of defending against claims of liability, of remediating any contaminated property, or of paying personal injury claims could reduce our earnings and cash flows. 16 Table of Contents Index to Financial Statements We could become subject to liability for adverse environmental conditions in the buildings on our property. Some of our properties have building materials that contain asbestos.
If we do not generate sufficient cash flow from operations, and additional borrowings or refinancings or proceeds of assets sales or other sources of cash are not available to us, we may not have sufficient cash to enable us to meet all of our obligations.
If we do not generate sufficient cash flow from operations, and additional borrowings or refinancing or proceeds of assets sales or other sources of cash are not available to us, 22 Table of Contents Index to Financial Statements we may not have sufficient cash to enable us to meet all of our obligations.
The Federal Deposit Insurance Corporation only insures amounts up to $250,000 per depositor. We have cash and cash equivalents and restricted cash deposited in certain financial institutions in excess of federally insured levels. Recently, we have seen the abrupt failure of more than one regional bank.
The Federal Deposit Insurance Corporation only insures amounts up to $250,000 per depositor. We have cash and cash equivalents and restricted cash deposited in certain financial institutions in excess of federally insured levels.
Although we hold cash primarily in the top ten banks in the United States and we did not experience any loss related to the recent bank failures, if any of the banking institutions in which we deposit funds ultimately fails, we may lose amounts of our deposits over federally insured levels.
Although we hold cash primarily in the top ten banks in the United States, if any of the banking institutions in which we deposit funds ultimately fails, we may lose amounts of our deposits over federally insured levels.
Our board of directors has overall authority to oversee our operations and determine our major corporate policies. This authority includes significant flexibility.
Our board of directors can take many actions without stockholder approval. Our board of directors has overall authority to oversee our operations and determine our major corporate policies. This authority includes significant flexibility.
This restriction may have the effect of delaying, deferring, or preventing a change in control, including an extraordinary transaction (such as a merger, tender offer, or sale of all or substantially all of our assets) that might provide a premium price for our common stock or otherwise be in the best interest of our stockholders. 18 Table of Contents Index to Financial Statements Our board of directors can take many actions without stockholder approval.
This restriction may have the effect of delaying, deferring, or preventing a change in control, including an extraordinary transaction (such as a merger, tender offer, or sale of all or substantially all of our assets) that might provide a premium price for our common stock or otherwise be in the best interest of our stockholders.
Climate change could also indirectly negatively impact our business by causing increased costs associated with energy, storm cleanup, or property and casualty or flood insurance premiums, deductibles, claims or liabilities, or a decrease in or unavailability of coverage, for properties in areas subject to severe weather. We may face risks associated with the transition to a lower-carbon economy.
Climate change could also indirectly negatively impact our business by causing increased costs associated with energy, storm cleanup, or property and casualty or flood insurance premiums, deductibles, claims or liabilities, or a decrease in or unavailability of coverage, for properties in areas subject to severe weather. We depend on key personnel, each of whom would be difficult to replace.
If our disclosure controls or internal controls over financial reporting are not effective, investors could lose confidence in our reported financial information. The design and effectiveness of our disclosure controls and procedures and our internal control over financial reporting may not prevent all errors, misstatements, or misrepresentations.
The design and effectiveness of our disclosure controls and procedures and our internal control over financial reporting may not prevent all errors, misstatements, or misrepresentations.
The trading market for our common stock relies in part on the research and reports that industry or financial analysts publish about us or our business. We do not control these analysts.
If securities analysts do not publish research or reports about our business or if they downgrade our common stock or our sector, the price of our common stock could decline. The trading market for our common stock relies in part on the research and reports that industry or financial analysts publish about us or our business.
Distributions are authorized and determined by our board of directors in its sole discretion and depend upon a number of factors, including: • cash available for distribution; • our results of operations and anticipated future results of operations; • our financial condition, especially in relation to our anticipated future capital needs of our properties; • the level of reserves we establish for future capital expenditures; • the distribution requirements for REITs under the Code; • the level of distributions paid by comparable listed REITs; • our operating expenses; and • other factors our board of directors deems relevant. 24 Table of Contents Index to Financial Statements We expect to continue to pay quarterly distributions to our stockholders; however, we bear all expenses incurred by our operations, and our funds generated by operations, after deducting these expenses, may not be sufficient to cover desired levels of distributions to our stockholders.
Distributions are authorized and determined by our board of directors in its sole discretion and depend upon a number of factors, including: • cash available for distribution; • our results of operations and anticipated future results of operations; • our financial condition, especially in relation to our anticipated future capital needs of our properties; • the level of reserves we establish for future capital expenditures; • the distribution requirements for REITs under the Code; • the level of distributions paid by comparable listed REITs; • our operating expenses; and • other factors our board of directors deems relevant.
Further, the ultimate resolution of such action could impact the availability or cost of some of our insurance coverage, which could adversely impact our results of operations and cash flows, expose us to increased risks that would be uninsured, or adversely impact our ability to attract officers and candidates for our board of directors.
Further, the ultimate resolution of such action could impact the availability or cost of some of our insurance coverage, which could adversely impact our results of operations and cash flows, expose us to increased risks that would be uninsured, or adversely impact our ability to attract officers and candidates for our board of directors. 17 Table of Contents Index to Financial Statements If our disclosure controls or internal controls over financial reporting are not effective, investors could lose confidence in our reported financial information.
For instance, if interest rates continue to rise, it is possible that the market price of our common stock will decrease, because potential investors may require a higher dividend yield on our common stock as market rates on interest-bearing securities, such as bonds, rise. 25 Table of Contents Index to Financial Statements If securities analysts do not publish research or reports about our business or if they downgrade our common stock or our sector, the price of our common stock could decline.
For instance, if interest rates continue to rise, it is possible that the market price of our common stock will decrease, because potential investors may require a higher dividend yield on our common stock as market rates on interest-bearing securities, such as bonds, rise.
Even if we qualify as a REIT, we may incur certain tax liabilities that would reduce our cash flow and impair our ability to make distributions. Even if we maintain our status as a REIT, we may be subject to U.S. federal income taxes or state taxes, which would reduce our cash available for distribution to our stockholders.
Even if we maintain our status as a REIT, we may be subject to U.S. federal income taxes or state taxes, which would reduce our cash available for distribution to our stockholders. For example, we will be subject to federal income tax on any undistributed REIT taxable income.
In addition, failure to meet any of these covenants, including the financial coverage ratios, could cause an event of default under or accelerate some or all of our indebtedness, which would have a material adverse effect on us. 23 Table of Contents Index to Financial Statements Increases in interest rates would cause the amount of our variable-rate debt payments to also increase and could limit our ability to make distributions to our stockholders.
In addition, failure to meet any of these covenants, including the financial coverage ratios, could cause an event of default under or accelerate some or all of our indebtedness, which would have a material adverse effect on us.
Our charter permits our board of directors to issue stock with terms that may subordinate the rights of our common stockholders, which may discourage a third party from acquiring us in a manner that could result in a premium price for our common stock or otherwise benefit our stockholders.
Any of these actions could increase our operating expenses, impact our ability to make distributions, or reduce the value of our assets without giving our stockholders the right to vote. 18 Table of Contents Index to Financial Statements Our charter permits our board of directors to issue stock with terms that may subordinate the rights of our common stockholders, which may discourage a third party from acquiring us in a manner that could result in a premium price for our common stock or otherwise benefit our stockholders.
Net operating losses of a REIT may not be carried back to any taxable year, regardless of whether the taxpayer qualified as a REIT in such taxable year.
Under H.R. 1, federal net operating losses incurred in taxable years beginning after December 31, 2017 can be carried forward indefinitely. Net operating losses of a REIT may not be carried back to any taxable year, regardless of whether the taxpayer qualified as a REIT in such taxable year.
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.
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. 23 Table of Contents Index to Financial Statements A downgrade in our credit ratings, the credit ratings of Piedmont OP or the credit ratings of our or Piedmont OP's unsecured debt securities could materially adversely affect our business and financial condition.
Uninsured losses or losses in excess of our insurance coverage could adversely affect our financial condition and our cash flow, and there can be no assurance as to future costs and the scope of coverage that may be available under insurance policies.
Further, one or more of our tenants could experience a cyber incident which could impact their operations and ability to perform under the terms of their lease with us. 14 Table of Contents Index to Financial Statements Uninsured losses or losses in excess of our insurance coverage could adversely affect our financial condition and our cash flow, and there can be no assurance as to future costs and the scope of coverage that may be available under insurance policies.
In addition, if contamination is discovered on our properties, environmental laws may impose restrictions on the manner in which property may be used or businesses may be operated, and these restrictions may require substantial expenditures or prevent us from entering into leases with prospective tenants. 16 Table of Contents Index to Financial Statements Some of our properties are adjacent to or near other properties that have contained or currently contain underground storage tanks used to store petroleum products or other hazardous or toxic substances.
In addition, if contamination is discovered on our properties, environmental laws may impose restrictions on the manner in which property may be used or businesses may be operated, and these restrictions may require substantial expenditures or prevent us from entering into leases with prospective tenants.
H.R. 1 also includes limitations on the deductibility of certain compensation paid to our executives, certain interest payments, and certain net operating loss carryforwards, each of which could potentially increase our taxable income and our required distributions. Under H.R. 1, federal net operating losses incurred in taxable years beginning after December 31, 2017 can be carried forward indefinitely.
This could cause us to recognize taxable income prior to the receipt of the associated cash. H.R. 1 also includes limitations on the deductibility of certain compensation paid to our executives, certain interest payments, and certain net operating loss carryforwards, each of which could potentially increase our taxable income and our required distributions.
Accordingly, we may be unable to anticipate these techniques or to implement adequate security barriers or other preventative measures, and thus it is impossible for us to entirely mitigate this risk. Further, one or more of our tenants could experience a cyber incident which could impact their operations and ability to perform under the terms of their lease with us.
Accordingly, we may be unable to anticipate these techniques or to implement adequate security barriers or other preventative measures, and thus it is impossible for us to entirely mitigate this risk.
As a result of such additional tax liability, we might need to borrow funds or liquidate certain investments on terms that may be disadvantageous to us in order to pay the applicable tax. 20 Table of Contents Index to Financial Statements Failure of our operating partnership to be treated as a disregarded entity or a partnership would have serious adverse consequences to our stockholders.
This treatment would reduce our net earnings available for investment or distribution to our stockholders because of the additional tax liability to us for the years involved. As a result of such additional tax liability, we might need to borrow funds or liquidate certain investments on terms that may be disadvantageous to us in order to pay the applicable tax.
The U.S. stock markets, including the NYSE on which our common stock is listed, have historically experienced significant price and volume fluctuations.
Given this uncertainty, we cannot predict the impact, if any, of these conditions to our business. There are significant price and volume fluctuations in the public markets, including on the exchange which we listed our common stock. The U.S. stock markets, including the NYSE on which our common stock is listed, have historically experienced significant price and volume fluctuations.
Investors are urged to consult with their own tax advisor with respect to the impact of recent legislation on ownership of shares and the status of legislative, regulatory, or administrative developments and proposals, and their potential effect on ownership of shares.
Investors are urged to consult with their own tax advisor with respect to the impact of recent legislation on ownership of shares and the status of legislative, regulatory, or administrative developments and proposals, and their potential effect on ownership of shares. 20 Table of Contents Index to Financial Statements Even if we qualify as a REIT, we may incur certain tax liabilities that would reduce our cash flow and impair our ability to make distributions.
This continued development and enhancement will require us to expend additional resources, including to investigate and remediate any information security vulnerabilities that may be detected.
We are continuously developing and enhancing our controls, processes, and practices designed to protect our systems, computers, software, data, and networks from attack, damage, or unauthorized access. This continued development and enhancement will require us to expend additional resources, including to investigate and remediate any information security vulnerabilities that may be detected.
The success of our investments materially depends on the financial stability of our tenants, any of whom may experience a change in their business at any time.
We depend on tenants for our revenue, and accordingly, lease terminations or tenant defaults, particularly by one of our significant lead tenants, could adversely affect the income produced by our properties. The success of our investments materially depends on the financial stability of our tenants, any of whom may experience a change in their business at any time.
A recharacterization of transactions undertaken by our operating partnership may result in lost tax benefits or prohibited transactions, which would diminish cash distributions to our stockholders, or even cause us to lose REIT status.
The more favorable rates applicable to regular corporate dividends could cause investors who are individuals to perceive investments in REITs to be relatively less attractive than investments in non-REIT corporations that make distributions. 21 Table of Contents Index to Financial Statements A recharacterization of transactions undertaken by our operating partnership may result in lost tax benefits or prohibited transactions, which would diminish cash distributions to our stockholders, or even cause us to lose REIT status.
Any change in our dividend policy could have a material adverse effect on the market price of our common stock. There are significant price and volume fluctuations in the public markets, including on the exchange which we listed our common stock.
Any change in our dividend policy could have a material adverse effect on the market price of our common stock. Adverse U.S. and global economic conditions could have a negative effect on our business, results of operations and financial condition and liquidity.
Removed
We may be adversely affected by trends in the office real estate industry. Businesses have increasingly implemented remote work and flexible work arrangements. There has also been a trend of businesses utilizing open workspaces and “co-working” spaces.
Added
However, such upgrades, new technology and training may not be sufficient to protect us from all risks, particularly as techniques used by bad actors continue to evolve (including through the use of artificial intelligence).
Removed
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.
Added
Some of our properties are adjacent to or near other properties that have contained or currently contain underground storage tanks used to store petroleum products or other hazardous or toxic substances.
Removed
Among other effects, any restrictions put in place to combat public health epidemics or outbreaks could cause some of our tenants to close or operate at reduced capacity for an extended period of time, in some cases causing such tenants to default on their leases.
Added
Failure of our operating partnership to be treated as a disregarded entity or a partnership would have serious adverse consequences to our stockholders.
Removed
For example, the COVID-19 pandemic and its associated variants adversely impacted the global economy and the regional U.S. economies in which we operate, and negatively impacted some of our tenants’ ability to pay their rent.
Added
Tax reform legislation commonly known as the Tax Cuts and Jobs Act, or TCJA, which generally took effect for taxable years beginning on or after January 1, 2018 (subject to certain exceptions), made many changes to the U.S. federal income tax laws that significantly impacted the taxation of individuals, corporations (both regular C corporations as well as corporations that have elected to be taxed as REITs), and the taxation of taxpayers with overseas assets and operations.
Removed
The COVID-19 pandemic also accelerated some companies’ adoption of remote work platforms and could result in longer term technological and social changes that reduce the demand for office space among companies generally. Our tenants' inability to pay rent under our leases and any declines in demand for office space could adversely affect our own liquidity and operating results.
Added
Many of the TCJA’s changes were made permanent by legislation commonly known as the “One Big Beautiful Bill Act” (“OBBBA”), which was signed into law on July 4, 2025. Additional changes to tax laws are likely to continue to occur in the future.
Removed
Future terrorist attacks, armed hostilities, or civil unrest in the major metropolitan areas in which we own properties could significantly impact the demand for, and value of, our properties.
Added
Any increases in interest rates would cause the amount of our variable-rate debt payments to also increase and could limit our ability to make distributions to our stockholders.
Removed
However, such upgrades, new technology and training may not be sufficient to protect us from all risks. We are continuously developing and enhancing our controls, processes, and practices designed to protect our systems, computers, software, data, and networks from attack, damage, or unauthorized access.
Added
We expect to resume paying quarterly distributions to our stockholders in the future; however, we bear all expenses incurred by our operations, and our funds generated by operations, after deducting these expenses, may not be sufficient to cover desired levels of distributions to our stockholders.
Removed
Transitioning to a lower-carbon economy may entail extensive policy, legal, technological, and market changes to address mitigation and adaption requirements related to climate change. Depending on the nature, speed, and focus of these changes, transition risks may pose varying levels of financial and reputational risk to us or our tenants.
Added
A general slowdown in the U.S. or global economy, uncertainty and volatility in financial markets, efforts of governments to stimulate or stabilize the economy and other unfavorable changes in economic conditions, such as inflation, higher interest rates, tightening of the credit markets, recession or slowing growth, as well as an increase in trade tensions and related tariffs with U.S. trading partners, could negatively impact our business, financial condition and liquidity, and the business and operations of our tenants.
Removed
Policy action around climate change such as implementing carbon-pricing mechanisms to reduce green house gas emission, shifting energy use toward lower emission sources, adopting energy-efficiency solutions, encouraging greater water efficiency measures, and promoting more sustainable land-use practices can result in financial impacts to both us and our tenants, including additional costs of auditing and reporting such data.
Added
Macroeconomic weakness and uncertainty may also make it more difficult to accurately forecast operating results and raise or refinance debt. Sustained uncertainty about, or worsening of, current global economic conditions and further tariffs and escalations of trade tensions between the U.S. and its trading partners and the decoupling of the global economies could result in an economic slowdown.
Removed
Alterations to third-party certifications/ratings may impact investor or tenant demand and consequential valuation for buildings with lower scoring. Climate related litigation claims can result in financial and reputational damage.
Removed
Technology improvements or innovations that support the transition to a lower-carbon, energy efficient economic system and shifts in supply and demand for certain commodities, products, and services as climate-related risks and opportunities are increasingly taken into account may affect the strength and competitiveness of our tenants' business, and ultimately their ability to meet their rental obligations to us.
Removed
Climate change has also been identified as a potential source of 17 Table of Contents Index to Financial Statements reputational risk tied to changing customer or community perceptions of an organization's contribution to or detraction from the transition to a lower-carbon economy. We depend on key personnel, each of whom would be difficult to replace.
Removed
Any of these actions could increase our operating expenses, impact our ability to make distributions, or reduce the value of our assets without giving our stockholders the right to vote.
Removed
This treatment would reduce our net earnings available for investment or distribution to our stockholders because of the additional tax liability to us for the years involved.
Removed
In particular, the Tax Cuts and Jobs Act ("H.R. 1"), which was effective for us for tax year 2018, made many significant changes to the U.S. federal income tax laws. A number of the changes that affected noncorporate taxpayers will expire at the end of 2025 unless Congress acts to extend them.
Removed
These changes impacted us, our stockholders, and our tenants in various ways and the IRS continues to issue clarifying guidance with respect to certain of the provisions of H.R. 1, any of which may be adverse or potentially adverse compared to prior law. Additional changes to tax laws are likely to continue to occur in the future.
Removed
For example, we will be subject to federal income tax on any undistributed REIT taxable income.
Removed
This could cause us to recognize taxable 21 Table of Contents Index to Financial Statements income prior to the receipt of the associated cash.
Removed
The more favorable rates applicable to regular corporate dividends could cause investors who are individuals to perceive investments in REITs to be relatively less attractive than investments in non-REIT corporations that make distributions, particularly after the scheduled expiration of the 20% deduction applicable to qualified REIT dividends on December 31, 2025.
Removed
A downgrade in our credit ratings, the credit ratings of the Operating Partnership or the credit ratings of our or the Operating Partnership's unsecured debt securities could materially adversely affect our business and financial condition.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

11 edited+1 added−0 removed12 unchanged
Biggest changeAdditionally, 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.
Biggest changeWe 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.
ITEM 1C. CYBERSECURITY Cybersecurity Risk Management and Strategy To identify and assess material risks from cybersecurity threats, our enterprise risk management program considers cybersecurity threats alongside other company risks as part of our overall risk assessment process. In addition, we perform an external, specific cybersecurity risk assessment every eighteen months.
ITEM 1C. CYBERSECURITY Cybersecurity Risk Management and Strategy To identify and assess material risks from cybersecurity threats, our enterprise risk management program considers cybersecurity threats alongside other company risks as part of our overall risk assessment process. In addition, we perform an external, specific cybersecurity risk assessment every eighteen months to assess and identify risks.
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.
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, cybersecurity risk matters, and the MSSP.
This group would be notified through our Incident Response Plan/Policy and appropriate actions undertaken in accordance with the plan document if a cyber-attack were to occur. Our Vice President of Risk Management is a Certificated Information Systems Auditor (CISA) and a Certified Internal Auditor (CIA) and holds a Certificate in Risk Management Assurance (CRMA).
This group would be notified through our Incident Response Plan/Policy and appropriate actions undertaken in accordance with the plan document if a cyber-attack were to occur. Our Senior Vice President of Risk Management is a Certificated Information Systems Auditor (CISA) and a Certified Internal Auditor (CIA) and holds a Certificate in Risk Management Assurance (CRMA).
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.
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 Officer has primary responsibility for overseeing our information systems and information technology resources, including risks from cybersecurity threats.
Our Vice President of Risk Management monitors and tests these initiatives on a periodic basis.
Our Senior Vice President of Risk Management monitors and tests these initiatives on a periodic basis.
Cybersecurity Governance The Audit Committee of the board of directors oversees cybersecurity risk and is comprised of three independent members with diverse expertise including, risk management, technology, and finance, equipping them to oversee cybersecurity risks effectively.
Cybersecurity Governance The Audit Committee of the board of directors oversees cybersecurity risk and is comprised of four independent members with diverse expertise including, risk management, technology, and finance, equipping them to oversee cybersecurity risks effectively.
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.
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 an annual basis.
Further, we have a documented business continuity plan that is updated and tested on an annual basis and we carry an information security risk insurance policy.
Further, we have a documented business continuity plan that is updated and tested annually and we carry an information security risk insurance policy.
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.
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, our Chief Executive Officer, our Director of IT, our Senior Vice President of Risk Management, a virtual Chief Information Security Officer (a "vCISO") with our managed security service provider (an “MSSP”), and certain other members of our information technology staff.
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.
Audit results 26 Table of Contents Index to Financial Statements and the risk assessments are reviewed by our Chief Financial Officer, our Director of IT, the vCISO, and our Senior Vice President of Risk Management. Any exceptions are addressed with a remediation plan and implemented with appropriate resources.
Added
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.

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, 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.
Biggest changeThe following table shows lease expirations of our in-service office portfolio as of December 31, 2025 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 (%) 2025 (1) $ 2,938 0.5 2026 55,048 9.5 2027 56,136 9.7 2028 50,769 8.8 2029 54,270 9.4 2030 58,690 10.2 2031 45,335 7.8 2032 40,110 6.9 2033 14,120 2.4 2034 50,978 8.8 2035 31,943 5.5 2036 26,720 4.6 2037 48,928 8.5 Thereafter 42,737 7.4 $ 578,722 100.0 28 Table of Contents Index to Financial Statements (1) Includes leases with an expiration date of December 31, 2025, comprised of approximately 80,000 square feet.
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.
Certain Restrictions Related to our Properties As of December 31, 2025, 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, 2025.
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.
ITEM 2. PROPERTIES Overview As of December 31, 2025, we owned and operated a portfolio comprised of 29 in-service projects and three redevelopment projects. As of December 31, 2025 and 2024, our in-service p ortfolio was 89.6% and 88.4% leased, respectively, with an average lease term remaining as of each period end of six years.
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.
ALR related to our in-service portfolio was $578.7 million, or $43.31 per leased square foot, as of December 31, 2025 as compared with $567.3 million, or $41.91 per leased square foot, as of December 31, 2024.
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.
As of December 31, 2025, our average lease size was approximately 14,000 square feet, and no single tenant accounts for more than 5% of our ALR.
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Property Statistics The following table shows the geographic diversification of our in-service portfolio as of December 31, 2025: Location Annualized Lease Revenue (in thousands) Rentable Square Feet (in thousands) Percentage of Annualized Lease Revenue (%) Percent Leased (%) Atlanta $ 185,462 4,731 32.0 94.4 Dallas 114,331 2,821 19.7 93.2 Orlando 67,671 1,754 11.7 94.4 Northern Virginia / Washington, D.C. 57,111 1,584 9.9 69.1 New York 54,946 1,047 9.5 92.7 Minneapolis 44,431 1,434 7.7 83.5 Boston 34,079 936 5.9 84.6 Other (1) 20,691 614 3.6 91.2 $ 578,722 14,921 100.0 89.6 (1) Includes 1430 Enclave Parkway and Enclave Place in Houston, Texas.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeComparison 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.
Biggest changeComparison of Cumulative Total Return of One or More Companies, Peer Groups, Industry Indices, and/or Broad Markets As of the year ended December 31, 2020 2021 2022 2023 2024 2025 Piedmont Realty Trust, Inc. $ 100.00 $ 118.62 $ 63.16 $ 53.88 $ 73.91 $ 68.56 FTSE NAREIT Equity Office $ 100.00 $ 122.00 $ 76.10 $ 77.65 $ 94.35 $ 81.15 FTSE NAREIT Equity REITs $ 100.00 $ 143.24 $ 108.34 $ 123.21 $ 133.97 $ 137.83 S&P 500 $ 100.00 $ 128.71 $ 105.40 $ 133.10 $ 166.40 $ 196.16 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 2025.
Purchases 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.
Purchases of Equity Securities By the Issuer and Affiliated Purchasers There were no repurchases of shares of our common stock during the fourth quarter of 2025.
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.
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 12, 2026, there were 6,144 common stockholders of record of our common stock.
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.
Our board of directors declared a quarterly dividend of $0.125 per common share for the first quarter ended March 31, 2025, and suspended the quarterly dividend beginning with the second quarter ended June 30, 2025. 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, 2020 through December 31, 2025.

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 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.
Biggest changeOther 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 loss applicable to Piedmont 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, 2025 and 2024, respectively (in thousands): Cash Basis Accrual Basis December 31, 2025 December 31, 2024 December 31, 2025 December 31, 2024 Net loss applicable to Piedmont (GAAP basis) $ (83,620) $ (79,069) $ (83,620) $ (79,069) Net income applicable to noncontrolling interest 19 5 19 5 Interest expense 128,005 122,984 128,005 122,984 Depreciation 166,506 156,787 166,506 156,787 Amortization 60,545 69,674 60,545 69,674 Depreciation and amortization attributable to noncontrolling interests 38 79 38 79 Impairment charges — 33,832 — 33,832 Loss/(gain) on sale of real estate assets (2,013) 445 (2,013) 445 EBITDAre (1) 269,480 304,737 269,480 304,737 Loss on early extinguishment of debt 37,788 386 37,788 386 Executive separation costs — 4,831 — 4,831 Core EBITDA (2) 307,268 309,954 307,268 309,954 General & administrative expenses 30,587 30,592 30,587 30,592 Management fee revenue (3) (325) (1,091) (325) (1,091) Other income (303) (3,915) (303) (3,915) Straight-line rent effects of lease revenue (29,192) (21,566) Straight-line effects of lease revenue attributable to noncontrolling interests (4) 3 Amortization of lease-related intangibles (7,937) (10,019) Property NOI 300,094 303,958 337,227 335,540 Net operating (income)/loss from: Acquisitions — — — — Dispositions (4) (1,647) (6,463) (1,756) (6,398) Other investments (5) (1,248) (745) (1,637) (1,197) Same Store NOI $ 297,199 $ 296,750 $ 333,834 $ 327,945 Change period over period in Same Store NOI 0.2 % N/A 1.8 % N/A (1) We calculate Earnings Before Interest, Taxes, Depreciation, and Amortization- Real Estate ("EBITDAre") in accordance with the current NAREIT definition.
NAREIT currently defines FFO as Net income/(loss) (calculated in accordance with GAAP), excluding depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, gains and losses from change in control, and impairment write-downs of certain real estate assets, goodwill, and investment in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity, along with appropriate adjustments to those reconciling items for joint ventures, if any.
NAREIT currently defines FFO as Net loss (calculated in accordance with GAAP), excluding depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, gains and losses from change in control, and impairment write-downs of certain real estate assets, goodwill, and investment in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity, along with appropriate adjustments to those reconciling items for joint ventures, if any.
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.
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 loss attributable to Piedmont.
We calculate Property NOI beginning with Net income/(loss) (calculated in accordance with GAAP) before adjusting for interest, depreciation and amortization and removing any impairments and gains or losses from sales of property and other significant infrequent items that create volatility within our earnings and make it difficult to determine the earnings generated by our core ongoing business.
We calculate Property NOI beginning with Net loss (calculated in accordance with GAAP) before adjusting for interest, depreciation and amortization and removing any impairments and gains or losses from sales of property and other significant infrequent items that create volatility within our earnings and make it difficult to determine the earnings generated by our core ongoing business.
The changing of these assumptions and the subjectivity of the market based assumptions used in the discounted future cash flow analysis, particularly the capitalization rates and discount rates, could result in a changed assessment or an incorrect assessment of the reporting unit’s estimated fair value and, therefore, could result in the misstatement of the carrying value of our reporting units and related goodwill and our reported net income/(loss) attributable to Piedmont.
The changing of these assumptions and the subjectivity of the market based assumptions used in the discounted future cash flow analysis, particularly the capitalization rates and discount rates, could result in a changed assessment or an incorrect assessment of the reporting unit’s estimated fair value and, therefore, could result in the misstatement of the carrying value of our reporting units and related goodwill and our reported net loss attributable to Piedmont.
In addition, office leases for both new and renewing tenants often contain upfront rental and/or operating expense abatement periods which delay the cash flow benefits of the lease even after the new or renewed lease has commenced, negatively impacting Property NOI and Same Store NOI on a cash basis until such abatements expire.
In addition, office leases for both new and renewing tenants often contain upfront rental and/or operating expense abatement periods which may delay the cash flow benefits of the lease even after the new or renewed lease has commenced, negatively impacting Property NOI and Same Store NOI on a cash basis until such abatements expire.
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.
The amount and form of payment (cash or stock issuance) of future dividends, if any, 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 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.
These metrics are non-GAAP financial measures and should not be viewed as an alternative measurement of our operating performance to net income/(loss). Management believes that accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time.
These metrics are non-GAAP financial measures and should not be viewed as an alternative measurement of our operating performance to net loss. Management believes that accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time.
Same Store NOI, on either a cash or accrual basis, is a non-GAAP financial measure and should not be viewed as an alternative to net income/(loss) calculated in accordance with GAAP as a measurement of our operating performance.
Same Store NOI, on either a cash or accrual basis, is a non-GAAP financial measure and should not be viewed as an alternative to net loss calculated in accordance with GAAP as a measurement of our operating performance.
We calculate Core FFO by starting with FFO, as defined by NAREIT, and adjusting for gains or losses on the early extinguishment of swaps and/or debt and any significant non-recurring or infrequent items.
We calculate Core FFO by starting with FFO, as defined by NAREIT, and adjusting for gains or losses on the early extinguishment of debt and any significant non-recurring or infrequent items.
Core FFO is a non-GAAP financial measure and should not be viewed as an alternative to net income/(loss) calculated in accordance with GAAP as a measurement of our operating performance.
Core FFO is a non-GAAP financial measure and should not be viewed as an alternative to net loss calculated in accordance with GAAP as a measurement of our operating performance.
Property NOI is a non-GAAP financial measure and should not be viewed as an alternative to net income/(loss) calculated in accordance with GAAP as a measurement of our operating performance.
Property NOI is a non-GAAP financial measure and should not be viewed as an alternative to net loss calculated in accordance with GAAP as a measurement of our operating performance.
AFFO is a non-GAAP financial measure and should not be viewed as an alternative to net income/(loss) calculated in accordance with GAAP as a measurement of our operating performance.
AFFO is a non-GAAP financial measure and should not be viewed as an alternative to net loss calculated in accordance with GAAP as a measurement of our operating performance.
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.
Additionally, as of December 31, 2025, 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.
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.
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, 2025 and 2024, and for the years ended December 31, 2025, 2024, and 2023, included elsewhere in this Annual Report on Form 10-K.
Such an event could materially adversely affect our net income/(loss) and net cash available for distribution to our stockholders.
Such an event could materially adversely affect our net loss and net cash available for distribution to our stockholders.
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.
We typically lease space to creditworthy corporate or governmental tenants on a long-term basis. As of December 31, 2025, our average lease was approximately 14,000 square feet with six years of lease term remaining.
(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.
(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 three years ended December 31, 2025 as they would reduce the loss per share presented.
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.
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 (2025 vs. 2024) Overview Net loss applicable to common stockholders for the year ended December 31, 2025 was approximately $83.6 million, or $0.67 per diluted share, as compared with $79.1 million, or $0.64 per diluted share, for the year ended December 31, 2024.
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").
Management's Discussion and Analysis of Financial Condition and Results of Operations - Results of Operations (2024 vs. 2023)" in our Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC on February 19, 2025, for a discussion of the results of operations for the year ended December 31, 2024 as compared to the year ended December 31, 2023. 36 Table of Contents Index to Financial Statements Issuer and Guarantor Financial Information As of December 31, 2025, Piedmont, through its wholly-owned subsidiary Piedmont OP, had five separate issuances totaling approximately $1.7 billion of senior unsecured notes payable outstanding that mature in 2028, 2029, 2030, 2032 and 2033 (see Note 3 to our accompanying consolidated financial statements for additional details regarding each of these issuances) (collectively, the "Notes").
These two properties are included in "Other" below. See Note 14 to the accompanying consolidated financial statements for additional information and a reconciliation of Net income/(loss) applicable to Piedmont to Net Operating Income ("NOI").
These two properties are included in "Other" below. See Note 13 to the accompanying consolidated financial statements for additional information and a reconciliation of Net loss applicable to Piedmont to accrual-based net operating income ("NOI").
We believe that EBITDAre is helpful to investors as a supplemental performance measure because it provides a metric for understanding our results from ongoing operations without taking into account the effects of non-cash expenses (such as depreciation and amortization) and capitalization and capital structure expenses (such as interest 42 Table of Contents Index to Financial Statements expense and taxes).
We believe that EBITDAre is helpful to investors as a supplemental performance measure because it provides a metric for understanding our results from ongoing operations without taking into account the effects of non-cash expenses (such as depreciation and amortization) and capitalization and capital structure expenses (such as interest expense and taxes).
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.
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 Realty Trust, Inc. as Issuer and Guarantor, respectively As of December 31, 2025 As of December 31, 2024 Due from non-guarantor subsidiary $ 900 $ 900 Total assets $ 240,324 $ 376,871 Total liabilities $ 2,085,214 $ 2,108,306 For the Year Ended December 31, 2025 Total revenues $ 47,373 Net loss $ (155,188) 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.
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.
During the year ended December 31, 2025, we experienced a 10.1% and 19.1% 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, 2025, Same Store NOI increased by 0.2% and 1.8% on a cash and accrual basis, respectively, as newly commenced leases or those with expiring abatements outweighed expiring leases.
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, 2025, we completed approximately 2.5 million square feet of leasing, including approximately 1.7 million square feet of new tenant leases, which contributed to the increase in our in-service leased percentage as compared to December 31, 2024.
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.
The following table sets forth selected data from our consolidated statements of operations for the years ended December 31, 2025 and 2024, respectively, as well as each balance as a percentage of total revenues for the years presented (dollars in millions): December 31, 2025 % of Revenues December 31, 2024 % of Revenues Variance Revenue: Rental and tenant reimbursement revenue $ 538.0 $ 544.1 $ (6.1) Property management fee revenue 0.3 1.7 (1.4) Other property related income 26.7 24.5 2.2 Total revenues 565.0 100 % 570.3 100 % (5.3) Expense: Property operating costs 227.9 40 % 234.1 41 % (6.2) Depreciation 166.5 29 % 156.9 28 % 9.6 Amortization 60.5 11 % 69.7 12 % (9.2) Impairment charges — — % 33.8 6 % (33.8) General and administrative 30.6 5 % 35.4 6 % (4.8) 485.5 529.9 (44.4) Other income (expense): Interest expense (128.0) 23 % (123.0) 22 % (5.0) Other income 0.7 — % 4.3 1 % (3.6) Loss on early extinguishment of debt (37.8) 7 % (0.4) — % (37.4) Gain/(loss) on sale of real estate assets 2.0 — % (0.4) — % 2.4 Net loss $ (83.6) (15) % $ (79.1) 14 % $ (4.5) Revenue Rental and tenant reimbursement revenue decreased approximately $6.1 million for the year ended December 31, 2025 as compared to the prior year.
As of December 31, 2024, three projects, 222 South Orange Avenue in Orlando, Florida, and 9320 Excelsior Boulevard and Meridian, both in suburban Minneapolis, Minnesota, were classified as out of service as they undergo redevelopment.
As of December 31, 2025, three projects, 222 South Orange Avenue in Orlando, Florida, and 9320 Excelsior Boulevard and Meridian, both in suburban Minneapolis, Minnesota, were classified as out of service as they undergo redevelopment. Collectively, these out of service projects were approximately 62% leased as of December 31, 2025.
In addition to the amounts that we have already committed to as a part of executed leases, we also anticipate continuing to incur similar market-based tenant improvement allowances and leasing commissions in conjunction with procuring future leases for our existing portfolio of properties.
As of December 31, 2025, we had no individual tenant allowance commitments greater than $10 million. In addition to the amounts that we have already committed to as a part of executed leases, we also anticipate continuing to incur similar market-based tenant improvement allowances and leasing commissions in conjunction with procuring future leases for our existing portfolio of properties.
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.
Other property related income increased approximately $2.2 million for the year ended December 31, 2025 as compared to the prior year primarily due to increased parking income associated with increased utilization and higher transient parking at our office projects during the current year, as compared to the prior year. 35 Table of Contents Index to Financial Statements Expense Property operating costs decreased approximately $6.2 million for the year ended December 31, 2025 as compared to the prior year.
(4) Dispositions include One Lincoln Park in Dallas, Texas, sold in the first quarter of 2024, and 750 West John Carpenter Freeway in Irving, Texas, sold in the third quarter of 2024. (5) Other investments include active or recently completed out-of-service redevelopment projects and land.
(4) Dispositions include 80 and 90 Central, sold in the second quarter of 2025, 161 Corporate Center, sold in the first quarter of 2025, 750 West John Carpenter Freeway, sold in the third quarter of 2024, and One Lincoln Park, sold in the first quarter of 2024. (5) Other investments include active or recently completed out-of-service redevelopment projects and land.
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.
Leased Percentage The leased percentage of our in-service portfolio increased to 89.6% leased as of December 31, 2025, from 88.4% leased as of December 31, 2024.
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.
As of December 31, 2025, we had approximately 1.1 million square feet of executed leases for vacant space that are yet to commence representing approximately $46 million of future additional annual cash rents, and approximately 0.8 million square feet of executed leases currently under rental abatement, representing approximately $22 million of future additional annual cash rents.
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.
As of December 31, 2025, scheduled lease expirations for 2026 represented less than 10% of our Annualized Lease Revenue. 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.
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.
During the years ended December 31, 2025 and 2024, we incurred the following types of capital expenditures (in thousands): December 31, 2025 December 31, 2024 Capital expenditures for redevelopment/renovations $ 58,858 $ 96,790 Other capital expenditures, including building and tenant improvements 98,383 115,318 Total capital expenditures (1) $ 157,241 $ 212,108 (1) Of the total amounts paid, approximately $17.7 million and $19.9 million related to soft costs such as capitalized interest, payroll, and other general and administrative expenses for the year ended December 31, 2025 and 2024, respectively.
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.
The impact of this decrease was partially offset by the roll-up of rental rates and new leases commencing during the year ended December 31, 2025.
Other 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.
Other 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 loss to FFO, Core FFO, and AFFO for the years ended December 31, 2025, 2024, and 2023, respectively, are presented below (in thousands except per share amounts): 2025 2024 2023 GAAP net loss applicable to common stock $ (83,620) $ (79,069) $ (48,387) Depreciation of real assets 165,035 155,468 147,569 Amortization of lease-related costs 60,545 69,674 87,717 Impairment charges — 33,832 29,446 (Gain)/loss on sale of real estate assets (2,013) 445 (1,946) NAREIT FFO applicable to common stock $ 139,947 $ 180,350 $ 214,399 Adjustments: Executive separation costs — 4,831 — Loss on early extinguishment of debt 37,788 386 820 Core FFO applicable to common stock $ 177,735 $ 185,567 $ 215,219 Adjustments: Amortization of debt issuance costs and discounts on debt 6,189 5,142 5,442 Depreciation of non real estate assets 1,471 1,320 847 Straight-line effects of lease revenue (29,192) (21,566) (17,814) Stock-based compensation adjustments 7,391 6,632 6,337 Amortization of lease-related intangibles (7,937) (10,019) (13,879) Non-incremental capital expenditures (1) (70,714) (70,170) (53,690) AFFO applicable to common stock $ 84,943 $ 96,906 $ 142,462 Weighted-average shares outstanding – diluted (2) 126,139 124,926 123,702 NAREIT FFO per share (diluted) $ 1.11 $ 1.44 $ 1.73 Core FFO per share (diluted) $ 1.41 $ 1.49 $ 1.74 (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.
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.
The nature and timing of these additional sources of capital will be highly dependent on market conditions. 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.
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.
Depreciation expense increased approximately $9.6 million for the year ended December 31, 2025 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, 2024, partially offset by property dispositions in 2024 and 2025.
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.
The following table presents NOI by geographic segment (in thousands): Years Ended December 31, 2025 2024 Atlanta $ 116,007 $ 110,715 Dallas 60,743 62,332 Orlando 39,026 33,860 Northern Virginia/Washington, D.C. 28,610 34,086 Minneapolis 23,300 23,553 New York 31,634 30,200 Boston 25,669 28,296 Total reportable segments 324,989 323,042 Other 12,238 12,498 Total NOI $ 337,227 $ 335,540 Comparison of the Year Ended December 31, 2025 Versus the Year Ended December 31, 2024 Atlanta NOI increased due to several leases commencing at our Galleria on the Park and Glenridge Highlands projects during the year ended December 31, 2025 as compared to the same period in the prior year.
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.
Boston NOI decreased primarily due to sale of the 80 and 90 Central project during the year ended December 31, 2025 as compared to the same period in the prior year. 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 loss calculated in accordance with GAAP is the starting point for calculating FFO, Core FFO, and AFFO.
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.
For leases executed during the year ended December 31, 2025, we have committed to spend approximately $6.58 per square foot per year of lease term for tenant improvement allowances and lease commissions (net of expired lease commitments) as compared to $5.67 (net of expired lease commitments) for the year ended December 31, 2024 with the increase in the current year attributable to the significant amount of new tenant leasing completed.
We also believe that EBITDAre can help facilitate comparisons of operating performance between periods and with other REITs. However, other REITs may not define EBITDAre in accordance with the NAREIT definition, or may interpret the current NAREIT definition differently than us; therefore, our computation of EBITDAre may not be comparable to that of such other REITs.
However, other REITs may not define EBITDAre in accordance with the NAREIT definition, or may interpret 42 Table of Contents Index to Financial Statements the current NAREIT definition differently than us; therefore, our computation of EBITDAre may not be comparable to that of such other REITs.
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.
Additionally, we may use capital to repay debt when we deem it prudent to refinance or reduce various obligations. 33 Table of Contents Index to Financial Statements Finally, we may also use capital resources to pay dividends to our stockholders.
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.
The decrease is due to increased interest expense, net of interest income, in the current year as compared to the year ended December 31, 2024, as well as the sale of four projects subsequent to January 1, 2024. 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.
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.
Consequently, we believe that we have sufficient liquidity to meet our obligations for the foreseeable future; however, as part of our overall debt management strategy, 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.
(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.
Core FFO applicable to common stock was $1.41 per diluted share for the year ended December 31, 2025, as compared to $1.49 per diluted share for the same period in the prior year.
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.
Amortization expense decreased approximately $9.2 million for the year ended December 31, 2025 compared to the prior year. The decrease in amortization expense is associated with certain lease intangible assets at our existing projects becoming fully amortized subsequent to January 1, 2024.
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.
General and administrative expense decreased approximately $4.8 million for the year ended December 31, 2025 compared to the prior year almost exclusively as the result of the recognition of $4.8 million of executive separation costs during 2024.
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.
Comparison of the accompanying consolidated statements of operations for the year ended December 31, 2025 vs. the year ended December 31, 2024.
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).
Furthermore, we remove general and administrative expenses, income associated with property management performed by us for other organizations, and other income or expense items. For Property NOI (cash basis), straight-lined rents and fair value lease revenue are also eliminated; while such effects are not adjusted in calculating Property NOI (accrual basis).
"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.
"Capital expenditures for redevelopment/renovations" during the years ended December 31, 2025 and 2024 related to building upgrades, primarily to the lobbies and the addition of tenant amenities at certain of our buildings and assets under redevelopment.
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.
Other Income (Expense) Interest expense increased approximately $5.0 million for the year ended December 31, 2025 as compared to the prior year as a result of refinancing activity as well as a $2.0 million decrease in capitalized interest during the year ended December 31, 2025.
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.
Orlando NOI increased primarily due to the commencement of the Travel and Leisure lease at the 501 West Church project, as well several leases commencing at The Exchange project and the CNL Center I and II project during the year ended December 31, 2025 as compared to the same period in the prior year. Northern Virginia/Washington, D.C.
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 impact of these decreases is partially offset by an increase in other recoverable property operating costs such as utilities, repairs and maintenance, landscaping and security due to increased occupancy and utilization of our projects during the current year, as compared to the prior year.
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.
NOI decreased primarily due to the expiration or downsizing of certain tenants at our 1201 & 1225 Eye Street project, our 4250 North Fairfax Drive project, and our Arlington Gateway project during the year ended December 31, 2025 as compared to the same period in the prior year.
Removed
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.
Added
As of December 31, 2025, we had $553 million of borrowing capacity available under our $600 Million Unsecured 2022 Line of Credit and no required debt maturities until 2028.
Removed
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.
Added
The primary driver of the increase in net loss was an approximately $37.8 million loss on early extinguishment of debt recognized during the year ended 2025, which was largely offset by the non-recurrence of approximately $33.8 million of impairment charges recognized during the year ended 2024.
Removed
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.
Added
The decrease was primarily due to the disposition of four projects subsequent to January 1, 2024 as well as lower tenant reimbursement revenue in the current year as compared to the prior year associated with lower recoverable operating costs (as discussed below).
Removed
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.
Added
Property management fee revenue decreased approximately $1.4 million for the year ended December 31, 2025, as compared to the same period in the prior year due to the termination of certain third-party property management arrangements in 2024.
Removed
We currently do not anticipate incurring any unusually large or material capital expenditures within any given year in order to meet recognized sustainable development standards, and achieve our environmental impact goals.
Added
The variance was primarily due to reduced property tax expense due to lower tax assessments and successful appeals, as well as project dispositions subsequent to January 1, 2024 (as discussed above).
Removed
As of December 31, 2024, we had two individually significant unrecorded tenant allowance commitments greater than $10 million.
Added
The decrease was partially offset by an increase in amortization expense associated with deferred lease acquisition costs associated with new leasing activity during the two years ended December 31, 2025.
Removed
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.
Added
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. See Note 6 to our accompanying consolidated financial statements for further details.
Removed
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.
Added
During the year ended December 31, 2025, we repurchased approximately $312.7 million in aggregate principal amount of the $600 Million Unsecured Senior Notes due 2028. The premium paid to repurchase the notes, as well as the write-off of the pro-rata share of unamortized debt issuance costs, resulted in the recognition of a $37.3 million loss on early extinguishment of debt.
Removed
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.
Added
The loss on early extinguishment of debt in the prior year was due to the write-off of unamortized debt issuance costs associated with refinancing activity during the year ended December 31, 2024.
Removed
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.
Added
Gain on sale of real estate assets during the year ended December 31, 2025 primarily consists of the gain recognized on the sale of the 80 and 90 Central project in Boston, Massachusetts, which closed in May of 2025, as well as recognition of the return of amounts held in escrow for the 750 West John Carpenter project sold in July 2024.
Removed
The remainder of the increase primarily reflects increased accruals for potential performance-based compensation, largely associated with successful leasing during the year ended 2024.
Added
During the prior year we recognized a loss on the sale of the 750 West John Carpenter project of approximately $0.4 million. Results of Operations (2024 vs. 2023) Please refer to "Item 7.
Removed
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.
Added
NAREIT FFO applicable to common stock was $1.11 per diluted share for the year ended December 31, 2025, as compared to $1.44 per diluted share for the same period in the prior year due to the recognition of loss on early extinguishment of debt associated with debt retired during the current period, increased interest expense, net of interest income, recognized during the current year as compared to the year ended December 31, 2024, as well as the sale of four projects subsequent to January 1, 2024.
Removed
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.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

8 edited+3 added−6 removed2 unchanged
Biggest changeAs 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.
Biggest changeAs of December 31, 2025, 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 5.43% per annum with expirations ranging from 2027 to 2033.
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%.
Our interest rate swap agreements in place as of December 31, 2025 carried a notional amount of $325 million and a weighted-average fixed interest rate of 5.38%, and our interest swap agreements as of December 31, 2024 carried a notional amount totaling $450 million with a weighted-average fixed interest rate of 5.07%.
As a result, the primary market risk to which we believe we are exposed is interest rate risk. Many factors, including governmental monetary and tax policies, domestic and international economic and political considerations, and other factors that are beyond our control contribute to interest rate risk, including changes in the method pursuant to which SOFR rates are determined.
Many factors, including governmental monetary and tax policies, domestic and international economic and political considerations, and other factors that are beyond our control contribute to interest rate risk, including changes in the method pursuant to which SOFR rates are determined.
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.
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 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.
As of December 31, 2025, our consolidated principal outstanding for aggregate debt maturities consisted of the following (in thousands): 2026 2027 2028 2029 2030 Thereafter Total Maturing debt: Variable rate repayments $ — $ — $ 47,000 $ — $ — $ — $ 47,000 Variable rate average interest rate (2) — % — % 4.92 % — % — % — % 4.92 % Fixed rate repayments $ 3,433 $ 328,894 (1) $ 468,753 $ 400,000 $ 300,000 $ 700,000 $ 2,201,080 Fixed rate average interest rate (2) 4.10 % 5.36 % (1) 7.26 % 6.88 % 3.15 % 5.13 % 5.43 % (1) Includes the $325 Million Unsecured 2024 Term Loan which has a stated variable rate; however, Piedmont's interest rate swap agreements as of December 31, 2025 effectively fix the full principal balance to 5.38% through February 1, 2026.
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.
As of December 31, 2025, 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. As a result, the primary market risk to which we believe we are exposed is interest rate risk.
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.
The estimated fair value of our debt above as of December 31, 2025 and 2024 was approximately $2.3 billion and $2.2 billion, respectively.
(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.
Upon expiration of the interest rate swap agreements, the interest rate will revert to a variable rate based on SOFR, plus 1.30%. (2) See Note 3 to our accompanying consolidated financial statements for further details on our debt structure.
Removed
Our financial instruments consist of both fixed and variable-rate debt.
Added
As such, all of our debt as of December 31, 2025, other than the $600 Million Unsecured 2022 Line of Credit, is currently based on fixed or effectively-fixed interest rates to hedge against volatility in the credit markets. See Note 4 to our accompanying consolidated financial statements for further details.
Removed
Upon expiration of the interest rate swap agreements, the interest rate will be calculated as adjusted SOFR, plus 1.30%.
Added
As of December 31, 2025, we had a $47.0 million outstanding balance on our $600 Million Unsecured 2022 Line of Credit which has a stated rate of SOFR plus 1.05% per annum (based on our current corporate credit rating), resulting in a total interest rate of 4.92%.
Removed
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.
Added
Additionally, a 1.0% increase in variable interest rates on our outstanding borrowings as of December 31, 2025 would increase interest expense approximately $0.5 million on a per annum basis. 46 Table of Contents Index to Financial Statements
Removed
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
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.
Removed
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.

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