Form 8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Form 8-K

 

 

Current Report

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): June 8, 2010

 

 

Piedmont Office Realty Trust, Inc.

(Exact name of registrant as specified in its charter)

 

 

Commission File Number: 001-34626

 

MD   58-2328421

(State or other jurisdiction

of incorporation)

 

(IRS Employer

Identification No.)

11695 Johns Creek Parkway

Suite 350

Johns Creek, GA 30097-1523

(Address of principal executive offices, including zip code)

770-418-8800

(Registrant’s telephone number, including area code)

 

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Item 7.01. Regulation FD Disclosure

Beginning on June 8, 2010, Piedmont Office Realty Trust, Inc. (the “Registrant”) will be presenting the information attached as Exhibit 99.1 to this current report on Form 8-K to various groups in conjunction with the National Association of Real Estate Investment Trusts (“NAREIT”) REIT Week 2010: NAREIT’s Investor Forum. Pursuant to the rules and regulations of the Securities and Exchange Commission, such exhibit and the information set forth therein are deemed to have been furnished and shall not be deemed to be “filed” under the Securities Exchange Act of 1934.

Additionally, the exhibit to this Form 8-K may contain certain statements which constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such information is subject to certain risks and uncertainties, as well as known and unknown risks, which could cause actual results to differ materially from those projected or anticipated. Therefore, such statements are not intended to be a guarantee of our performance in future periods. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “anticipate,” “believe,” “continue” or similar words or phrases that are predictions of future events or trends and which do not relate solely to historical matters.

 

Item 9.01 Financial Statements and Exhibits

(d) Exhibit:

 

Exhibit No.

  

Description

99.1    Piedmont’s presentation in conjunction with NAREIT’s Investor Forum at REIT Week 2010


Signature(s)

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  Piedmont Office Realty Trust, Inc.
Date: June 8, 2010   By:  

/s/ Robert E. Bowers

    Robert E. Bowers
    Chief Financial Officer and Executive Vice President


Exhibit Index

 

Exhibit No.

  

Description

EX 99.1    Piedmont’s presentation in conjunction with NAREIT’s Investor Forum at REIT Week 2010
Presentation in conjunction with NAREIT's Investor Forum
1201 Eye Street, Washington, D.C.
©
2010 Piedmont Office Realty Trust, Inc.
Exhibit 99.1


1
1
Piedmont Office Realty Trust, Inc. (NYSE: PDM) is a fully-integrated and self-managed real estate investment trust (“REIT”) specializing in
the acquisition, ownership, management, development and disposition of primarily high-quality Class A office buildings located
predominately
in
large
U.S.
office
markets
and
leased
principally
to
high-credit-quality
tenants.
Since
its
first
acquisition in 1998, the
Company
has
acquired
over
$5.5
billion
of
office
and
industrial
properties
(inclusive
of
joint
ventures).
Rated
as
an investment-grade
company by Standard & Poor’s and Moody’s, Piedmont has maintained a low-leverage strategy while acquiring its properties. Over 87% of
our Annualized Lease Revenue ("ALR") is derived from our office properties located within the ten largest U.S. office markets, including
Chicago, Washington, D.C., the New York metropolitan area, Boston and greater Los Angeles.
We use market data and industry forecasts and projections throughout this presentation. We have obtained certain market and industry
data
from publicly available industry publications. These sources generally state that the information they provide has been obtained from
sources believed to be reliable, but that the accuracy and completeness of the information are not guaranteed. The forecasts and
projections
are
based
on
industry
surveys
and
the
preparers’
experience
in
the
industry,
and
there
is
no
assurance
that
any
of
the
projected
amounts
will
be
achieved.
We
believe
that
the
surveys
and
market
research
others
have
performed
are
reliable,
but
we
have
not
independently
verified
this
information.
Unless otherwise noted herein, all the information contained in this presentation is presented as of March 31, 2010.
Unless
the
context
indicates
otherwise,
the
term
“properties”
as
used
in
this
document
and
the
statistical
information
presented
in
this
document regarding our properties includes our wholly owned office properties and our office properties owned through our consolidated
joint ventures, but excludes our interest in eight properties owned through our equity interests in our unconsolidated joint ventures and our
two industrial properties.
Unless otherwise indicated, all information in this document gives effect to, and all share and per share amounts have been retroactively
adjusted to give effect to, the Recapitalization.
The information contained in this presentation does not contain all of the information that may be important to you and should be read in
conjunction with our Annual Report on Form 10-K for the year ended December 31, 2009 and our quarterly report on Form 10-Q for the
period ended March 31, 2010 and our other filings with the Securities and Exchange Commission. Such documents are available at
www.sec.gov and under the heading Investor Relations on our website at www.piedmontreit.com.
1
Introduction
©
2010 Piedmont Office Realty Trust, Inc.


2
2
Certain
statements
contained
in
this
presentation
constitute
forward-looking
statements
within
the
meaning
of
Section
27A
of
the
Securities
Act
of
1933,
as
amended
(the
“Securities
Act”)
and
Section
21E
of
the
Securities
Exchange
Act
of
1934,
as
amended
(the
“Exchange
Act”).
We
intend
for
all
such
forward-looking
statements
to be covered by the safe-harbor provisions for forward-looking
statements contained
in
Section
27A
of
the
Securities
Act
and
Section
21E of the Exchange Act, as applicable. Such information is subject
to
certain
risks
and
uncertainties,
as
well
as
known
and
unknown
risks,
which
could
cause
actual
results
to
differ
materially
from
those
projected
or
anticipated.
Therefore,
such
statements
are
not
intended
to
be
a
guarantee
of
our
performance
in
future
periods.
Such
forward-
looking
statements
can
generally
be
identified
by
our
use
of
forward-looking
terminology
such
as
“may,”
“will,”
“expect,”
“intend,”
“anticipate,”
“believe,”
“continue”
or similar words or phrases that are predictions of future events or trends and which do not relate solely to
historical matters.
The following are some of the factors that could cause the Company’s actual results and its expectations to differ materially from those
described in the Company’s forward-looking statements: the Company’s ability to successfully identify and consummate suitable
acquisitions; current adverse market and economic conditions; lease terminations or lease defaults, particularly by one of the Company’s
large lead tenants; the impact of competition on the Company’s efforts to renew existing leases or re-let space; changes in the economies
and other conditions of the office market in general and of the specific markets in which the Company operates; economic and regulatory
changes; additional risks and costs associated with directly managing properties occupied by government tenants; adverse market
and
economic
conditions
and
related
impairments
to
the
Company’s
real
estate
assets
and
other
intangible
assets;
the
success
of
the
Company’s
real
estate
strategies
and
investment
objectives;
availability
of
financing;
costs
of
complying
with
governmental
laws
and
regulations;
uncertainties
associated
with
environmental
and
other
regulatory
matters;
the
Company’s
ability
to
continue
to
qualify
as
a
REIT
under
the
Internal
Revenue
Code;
and other factors detailed in our most recent Annual Report on Form 10-K and other documents we file
with the Securities and Exchange Commission.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this
presentation. We cannot guarantee the accuracy of any such forward-looking statements contained in this presentation, and we do not
intend to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
This release contains certain non-GAAP financial measures such as FFO, AFFO, Core FFO, Core EBITDA, and Annualized Lease
Revenue (ALR). Please refer to our supplemental information package for definitions of these metrics on our website under the Investor
Relations section at www.piedmontreit.com.
2
Forward-Looking Statements
©
2010 Piedmont Office Realty Trust, Inc.


3
3
Investment Summary
Class A office properties in major U.S. markets
Strong relationships with high-credit quality, diverse tenant base
Demonstrated capital allocation track record
Focused investment strategy in select markets
“Fortress”
balance sheet with capacity for growth
Experienced and committed management team
3
©
2010 Piedmont Office Realty Trust, Inc.
Crescent Ridge II, Minnetonka, MN
Crescent Ridge II, Minnetonka, MN
4250 N. Fairfax Drive, Arlington, VA
4250 N. Fairfax Drive, Arlington, VA


4
4
Class A Office Properties in Major U.S. Markets
©
2010 Piedmont Office Realty Trust, Inc.
200 & 400 Bridgewater Crossing, Bridgewater, NJ
200 & 400 Bridgewater Crossing, Bridgewater, NJ
1055 East Colorado Boulevard, Pasadena, CA
1055 East Colorado Boulevard, Pasadena, CA


5
5
High-Quality Class A Portfolio
(1)
35 W. Wacker Drive, Chicago, IL
35 W. Wacker Drive, Chicago, IL
©
2010 Piedmont Office Realty Trust, Inc.
73 office properties
20.2 million square feet
52% CBD, 34% Suburban & 14% Urban
In-fill
Weighted average remaining lease term
of 5.7 years
Median building age of 11 years
68% of Annualized Lease Revenue
comes from government or investment
grade tenants.
Notes:
(1) Information presented as of March 31, 2010.


6
6
6
6
High-Quality Class A Office Buildings in Key Markets
(1)
©
2010 Piedmont Office Realty Trust, Inc.
Washington
DC
New York Metro
Phoenix
Florida
Detroit
Boston
(2)
6%
Minneapolis
6%
Los
Angeles
4%
Nashville
Tampa
Atlanta
20%
“Opportunistic”
Markets
“Concentration”
Markets
Headquarters
Regional Office
Chicago
26%
4%
Among
the
ten
largest
publicly
traded
office
REITs
with
the
majority
of
assets
(3)
located in the top ten U.S. office markets
Notes:
(1)
Reflects*Piedmont’s*percentage *of*ALR*in*concentration,*opportunistic*and*regional *office*markets*as*of*March*31,*2010.
(2) In May 2010, Piedmont announced the opening of a regional office in Boston.
(3) Over 87% of ALR is derived from the ten largest U.S. office markets based on rentable square footage as of March 31, 2010.
16%
4%
2%
Dallas
1%
1%
1%


7
7
Strong Relationships with High Credit Quality, Diverse
Tenant Base
One Brattle Square, Cambridge, MA
One Brattle Square, Cambridge, MA
One Independence Square, Washington, D.C.
One Independence Square, Washington, D.C.
©
2010 Piedmont Office Realty Trust, Inc.


8
** Various expirations ranging from 2011 to 2025.
Notes:
(1)
Denotes the year in which the lease for the majority of the tenant’s space expires.
(2)
Equal to ALR for each tenant divided by the total ALR at March 31, 2010 for our entire office portfolio, expressed as a percentage.
(3)
Credit
rating
may
reflect
credit
rating
of
parent
and/or
guarantor
or
the
2009
AmLaw
100
ranking
issued
by
The
American
Lawyer
Magazine.
(4)
BP Corporation sublets substantially all of its leased space to other tenants.
(5)
Kirkland
&
Ellis
will
depart
upon
the
expiration
of
its
lease
in
2011.
A
substantial
portion
of
its
space
has
been
re-leased
to
KPMG
LLP
effective
August
2012.
(6)   State Street Bank extended its lease by ten years in May 2010; the lease will now expire in 2021.
(7)   Piedmont previously announced the pending sale of the property which is scheduled to close in December 2010.
(8)
No “other”
tenant individually represents more than 1% of ALR.
(9)
As reported by Standard & Poor’s; includes investment grade companies or subsidiaries of investment grade companies.
8
8
8
Strong Tenant Credit-Quality
Tenant Diversification
Tenant Name
Lease Expiration
(1)
Percentage of ALR (%)
(2)
S&P
Credit
Rating
/
AmLaw
100
Ranking
(3)
U.S. Government
**
13.0
AAA
BP Corporation
(4)
2013
5.5
AA
Leo Burnett
2019
4.8
BBB+
US Bancorp
2014
3.8
A+
Winston & Strawn
2024
3.2
AmLaw
#34
Nestle
2015
3.2
AA
State of New York
2019
3.1
AA
Sanofi-aventis
2012
3.0
AA-
Independence Blue Cross
2023
2.6
Kirkland & Ellis LLP
(5)
2011
2.0
AmLaw
#7
Zurich
2011
1.8
AA-
State Street Bank
(6)
2021
1.6
AA-
Shaw
2018
1.6
BB+
DDB Needham
2018
1.5
A-
Lockheed Martin
2014
1.5
A-
City of New York
2020
1.3
AA
Citicorp
(7)
2010
1.3
A
Gemini
2013
1.3
A+
Caterpillar Financial
2022
1.2
A
Gallagher
2018
1.2
Other
(8)
Various
41.5
Total
100.0
©
2010 Piedmont Office Realty Trust, Inc.
No tenant other than the U.S. government accounts for more than 6% of ALR.
68%
of
ALR
derived
from
government
agencies
or
investment
grade
companies
(9)


9
9
9
9
Robust Industry Diversification
Industry
Diversification
(1)
(%
of
ALR
(2)
)
©
2010 Piedmont Office Realty Trust, Inc.
(%)
2.1
1.7
16.2
2.3
17.5
6.2
6.7
9.6
12.0
5.5
4.3
3.7
3.3
3.3
3.0
2.6
0
5
10
15
20
No industry other than a government entity accounts for more than 12% of ALR
Notes:
(1)
Industry determinations are made generally in accordance with the Standard Industry Classification (SIC) system definitions promulgated by the U.S. Department of Labor.
(2)
Equal
to
ALR
for
each
industry
divided
by
the
total
ALR
at
March
31,
2010
for
our
entire
office
portfolio,
expressed
as
a
percentage.
(3)
No “other”
industry individually represents more than 2% of ALR.


5.2
9.3
7.7
11.3
8.7
7.2
4.7
2.5
6.0
20.0
5.5
12.6
14.0
11.5
9.3
7.2
4.9
2.7
7.5
0.3
0.2
0.2
0.6
0.2
3.3
6.3
1.5
4.8
24.8
0
5
10
15
20
25
2010
2011
2012
2013
2014
2015
2016
2017
2018
Thereafter
10
10
Expiration & Retention
(%)
Notes:
(1)
Equal to ALR expiring each year divided by the total ALR at March 31, 2010 for our entire office portfolio, expressed as a percentage.
3/31/2010
Lease
Expiry
Profile
(%
of
ALR
(1)
)
Proactive strategy to address lease maturities along with a 77% retention rate
demonstrates depth of relationships with tenants
Non-Government Lease
Government Lease
©
2010 Piedmont Office Realty Trust, Inc.


Two Pierce Place, Itasca, IL
Two Pierce Place, Itasca, IL
11
11
Demonstrated Capital Allocation Track Record
©
2010 Piedmont Office Realty Trust, Inc.
1901 Market Street, Philadelphia, PA
1901 Market Street, Philadelphia, PA
2120 West End Ave., Nashville, TN
2120 West End Ave., Nashville, TN


791
44
218
15
5,002
464
59
5,000
1,000
0
1,000
1998 - 2004
2005 - 2010
12
12
12
12
12
Proven Capital-Recycling Discipline
2005 Special Dividend:
$4.86 / Share
($MM)
Acquisitions
Transaction
History
(1)
($MM)
1998 –
2004
2005 –
2010
Asset Acquisitions
5,002.4
464.4
% of Total Acquisitions
92%
8%
Asset Dispositions
(3)
59.4
1,009.2
% of Total Dispositions
6%
94%
Cost
44.3
790.8
Value Creation
(2)
15.1
218.5
Special Dividends
748.5
Notes:
(1)
Inclusive of joint venture transactions.
(2)
Represents
differential
in
aggregate
acquisition
and
disposition
prices
during
the
period.
(3)    Does not include 111 Sylvan Avenue in Englewood Cliffs, NJ which is under a binding sale contract for $55.0 million.
Track record of harvesting value and returning capital to shareholders
Capital
Return
to
Shareholders
June
2005
27 assets disposed of for $757 million of net proceeds,
representing a $190 million gain over the initial purchase
price
Approximately 99% of proceeds distributed to
shareholders through $4.86 per share special dividend
(approximately 16% of stockholders’
basis)
©
2010 Piedmont Office Realty Trust, Inc.
Cost Basis on Dispositions
Value Creation on Dispositions
(2)
1,009
(3)


13
13
Focused Investment Strategy in Select Markets
©
2010 Piedmont Office Realty Trust, Inc.
800 N. Brand Blvd., Glendale, CA
800 N. Brand Blvd., Glendale, CA
1225 Eye Street, Washington, D.C.
1225 Eye Street, Washington, D.C.
60 Broad Street, New York, NY
60 Broad Street, New York, NY


14
14
14
Acquisitions
“Concentration”
Markets
High barriers to entry, i.e. high replacement cost,
limited land supply, challenging entitlement process,
local environmental restrictions
Long-term growth opportunities and greater market
stability
Boston, Los Angeles, New York Metro and Washington
D.C.
“Opportunistic”
Markets
Solid markets with strong fundamentals but lower
barriers to entry and greater variability in supply and
demand for office space
Opportunities for strategically timed investments with
high quality properties and attractive bases
Atlanta, Chicago, Dallas, Florida, Minneapolis,
Nashville and Phoenix
Focus on major U.S. markets characterized by a diverse employment base, attractive
supply / demand trends and an active institutional investor base
©
2010 Piedmont Office Realty Trust, Inc.
Portfolio Evolution
($MM)
1998 –
2004
2005 –
2010
Net Transactions in
“Concentration”
Markets
2,065
149
Net Transactions in Non-
Concentration Markets
2,878
(694)
Target Geographic
Allocation
(Percentage of ALR)
60 –
70% “Concentration”
(Currently 46% of ALR)


15
15
15
Dispositions
Non-strategic Markets
Low barriers to entry, i.e. high development propensity,
abundant supply of land
Limited growth opportunities and/or greater market
volatility
Detroit, Denver, Cleveland, Austin, Houston, Portland,
Seattle
Timing Plays in Opportunistic Markets
Atlanta, Chicago, Dallas, Florida, Minneapolis, Nashville
and Phoenix
Small Number of Lower Quality Assets in Concentration
Markets
111 Sylvan Avenue, Englewood Cliffs, NJ
Potential to Sell Joint Venture Interests to Control
Exposure to Specific Geographic Markets
Focus on non-strategic assets
©
2010 Piedmont Office Realty Trust, Inc.
Sold 36 Properties
Exited 16 Non-Concentration Markets
Majority of Sold Assets:
Were Lower Quality and Less
Functional
Had Concentrated 2011-2012
Lease Expirations
Dispositions:
2005
and
After


16
16
“Fortress”
Balance Sheet with Capacity for Growth
©
2010 Piedmont Office Realty Trust, Inc.
Piedmont Pointe I and II, Washington D.C.
Piedmont Pointe I and II, Washington D.C.
Eastpointe Corp. Center, Issaquah, WA
Eastpointe Corp. Center, Issaquah, WA


17
17
17
17
Capitalization and Operating Stats ($MM)
3/31/2010
Total Debt                                                      
$ 1,403
Equity Market Capitalization
$ 3,424
Total Market Capitalization
$ 4,827
Book Value of Equity
$ 2,844
Net Book Value
$ 4,428
Debt-to-Total Market Capitalization
29.1%
Debt-to-Gross Assets
26.6%
Debt-to-Gross Real Estate Assets
30.7%
Fixed Charge Coverage
4.6x
Interest Expense Coverage
4.6x
S&P / Moody’s Rating
BBB/Baa2
Low Leverage and Stable Portfolio Enhance Access to Liquidity
Notes:
(1)  All of Piedmont’s outstanding debt as of March 31, 2010 is interest-only debt.
(2)  Core EBITDA is defined as net income before interest, taxes, depreciation and amortization, and incrementally adding back any impairment losses and extraordinary items.
(3)  Core FFO is FFO, as defined by NAREIT, adjusted for impairment losses and extraordinary items.
(4)  Piedmont has notified its lender that it intends to extend the maturity date of the $250 Million Unsecured Term Loan by  one year to June 2011 as allowed in the debt agreement.
(5)  Piedmont has no outstanding balance on the $500 Million Unsecured Line of Credit as of March 31, 2010 and intends to exercise the option to extend the maturity of the Line of Credit to August 2012, as
allowed in the debt agreement. 
(6)  As market conditions allow.
Limited near-term debt maturities and flexible capital structure utilizing 27% leverage;
Access
to
both
public
and
private
debt
and
equity
capital
sources
(6)
©
2010 Piedmont Office Realty Trust, Inc.
Core EBITDA
(2)
$ 88.6
Core FFO
(3)
$ 69.2
AFFO
$ 60.6
Dividends per Share
$ 0.315
Core EBITDA Margin
59.7%
Core FFO Payout %
77.7%
AFFO Payout %
88.8%
$0
$45
$0
$413
$695
$250
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
$4,428
Total Assets
2010
2011
2012
2013
2014
2015+
thereafter
Total Assets and Debt
(1)
by Maturity Date ($MM)
(4)
(5)


Experienced & Committed Management Team
18
18
©
2010 Piedmont Office Realty Trust, Inc.
Glenridge Highlands II, Atlanta, GA
Glenridge Highlands II, Atlanta, GA
AON Center, Chicago, IL
AON Center, Chicago, IL
Copper Ridge Center, Lyndhurst, NJ
Copper Ridge Center, Lyndhurst, NJ


19
19
19
Management Team
Donald A. Miller, CFA
President, Director and Chief Executive Officer
25 years of experience
2007
2010
President,
Director
and
CEO,
Piedmont
2003
2007
Chief
Real
Estate
Officer,
Wells Real Estate Funds
1994
2003
Lend
Lease
(last
position
held
Head
of U.S.
Equity Real Estate Operations)
1991
1994
Vice
President,
Prentiss
Properties
Carroll A. (Bo) Reddic, IV
Executive Vice President, Real Estate Operations
20 years of experience
2007
2010
Exec.
VP,
Piedmont
2005
2007
Managing
Director,
Wells
Real
Estate
Funds
1990
2005,
Executive
Director,
Morgan
Stanley
(including predecessor companies, The Yarmouth Group
and Lend Lease)
Robert E. Bowers
Chief Financial Officer
32 years of experience
2007
2010,
CFO
of
Piedmont
2004
2007,
CFO
of
Wells
Real
Estate
Funds
1997
2002,
CFO
and
Director
of
Net
Bank
1995 –
1996, CFO
of
CheckFree
Corporation
1984 –
1995, CFO and Director, Stockholder Systems
1978 –
1984, Arthur Andersen
Raymond L. Owens
Executive Vice President, Capital Markets
27 years of experience
2007
2010
Exec.
VP,
Piedmont
2002
2007
Managing
Director,
Wells
Real
Estate
Funds
1997
2002
Senior
Vice
President,
PM
Realty
Group
1995
1997
Vice
President,
GE
Asset
Management
1991
1994
Vice
President,
Travelers
Realty
Investment
1982
1991
Vice
President,
Aetna
Realty
Investors
Laura P. Moon
Senior Vice President, Chief Accounting Officer
18 years of experience
2007
2010
Senior
VP,
Piedmont
2005
2007
Vice
President,
Wells
Real
Estate
Funds
2002
2005
Sr.
Director
of
Financial
Planning,
ChoicePoint
1999
2002
Chief
Accounting
Officer,
Net
Bank
1991 –
1999 Senior Manager, Deloitte & Touche
Senior management averages 24 years of experience and has spent over
5 years working together managing the existing portfolio
©
2010 Piedmont Office Realty Trust, Inc.


Note:
(1)
Includes
Maryland
Law
“Business
and
Combination
Provision”
(Section
3-602)
and
“Control
Share
Acquisition”
(Section
3-701
through
3-710).
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20
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Corporate Governance Profile
Experienced Board with governance decision power vested in stockholders
©
2010 Piedmont Office Realty Trust, Inc.
Piedmont Board of Directors
Piedmont Board of Directors
7 out of 8 Board members are
independent
Annual election of all Board  members
Board compensation includes
restricted stock
Board members have investment in
the Company
Opt out of Maryland company anti-
takeover provisions
(1)
Exemption from the 5/50 rule
Relevant Independent Director                   Experience     
Year
Joined
Board
W. Wayne Woody, Chairman
Retired Senior Partner, KPMG
2003
Frank C. McDowell, Vice Chairman
Retired CEO, BRE Properties
2008
Michael R. Buchanan
Retired Head of Real Estate Investment Banking, Bank
of America
2002
Wesley E. Cantrell
Retired CEO, Lanier Worldwide
2007
William H. Keogler, Jr.
Retired Chairman, Keogler, Morgan & Co.; Director,
Robinson-Humphrey, Inc.
1998
Donald S. Moss
Retired Group Vice President, Avon
1998
Jeffrey L. Swope
Managing Partner, Champion Partners
2008


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Investment Highlights
High-quality Class A portfolio
Geographically diversified with 73 office buildings comprising over 20 million square feet
68% of ALR from government agencies or investment grade companies
Weighted average remaining lease term of 5.7 years
Focused asset / property management and investment strategy
8 regional offices directing efficient, hands-on operating approach
77% tenant retention rate since inception
(1)
Long-term
focus
on
“concentration”
markets
(i.e.,
Boston,
New
York
Metro,
Los
Angeles,
Washington
D.C.)
and
selective
presence
in
“opportunistic”
markets
Strong capital allocation track record
$6.5 billion of transaction activity since inception
92% of acquisitions between 1998 and 2004 and 94% of dispositions between 2005 and 2010
$748.5 million special dividend in 2005 following 27 asset portfolio sale
Significant capacity for growth
27% debt-to-gross assets
Available liquidity of $567 million
Focused investment strategy
Experienced management team
Average 24 years of industry experience and 5 years together managing existing portfolio
Experience working with and for institutional real estate investors
Notes:
(1)
Based
on
square
feet
that
has
become
available
for
renewal
since
inception.
Piedmont’s
tenant
retention
rate
for
the
three
months
ended
March
31,
2010  was 64% of tenants based on square feet that became available in Q1 2010.
©
2010 Piedmont Office Realty Trust, Inc.


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2010 Recent Events
Financing and Capital Activity
Issuer rating upgraded by Moody’s from Baa3 with a positive outlook to Baa2 with a stable outlook
Under contract to sell 111 Sylvan Avenue in Englewood Cliffs, NJ
©
2010 Piedmont Office Realty Trust, Inc.
111 Sylvan Avenue, Englewood Cliffs, NJ


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2010 Recent Events
Operations
Lease extension signed with State Street Bank for
234,668 square feet at 1200 Crown Colony Drive in
Quincy, MA
Lease extension and expansion signed with Advanced
Micro Devices for 132,857 square feet at 90 Central
Street in Boxborough, MA
Lease extension and expansion signed with Internal
Revenue Service for 101,178 square feet at 5000
Corporate Court in Holtsville, NY
New lease signed with Oracle America, Inc. for 55,760
square feet at 6031 Connection Drive in Irving, TX
New lease signed with ResMed
Corporation for 174,000
square feet at 110 Hidden Lake Circle in Duncan, SC
Regional management office open in Boston, MA
©
2010 Piedmont Office Realty Trust, Inc.
1200 Crown Colony Drive, Quincy, MA
6031 Connection Drive, Irving, TX