Piedmont Office Realty Trust, Inc.

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pdm-20230501

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): May 1, 2023

Piedmont Office Realty Trust, Inc.

(Exact name of registrant as specified in its charter)

Commission File Number: 001-34626


Maryland						58-2328421
(State or other jurisdiction of						(IRS Employer
incorporation)						Identification No.)

5565 Glenridge Connector Ste. 450

Atlanta, Georgia 30342

(Address of principal executive offices, including zip code)

(770) 418-8800

(Registrant's telephone number, including area code)

Not applicable

(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))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, $0.01 par value

PDM

New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.o

Item 2.02 Results of Operations and Financial Condition.

On May 1, 2023, Piedmont Office Realty Trust, Inc. (the "Registrant") issued a press release announcing its financial results for the first quarter 2023, and published supplemental information for the first quarter 2023 to its website. The press release and the supplemental information are attached hereto as Exhibit 99.1 and 99.2, respectively, and are incorporated herein by reference. Pursuant to the rules and regulations of the Securities and Exchange Commission, such exhibits 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.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits:


Exhibit No.						Description
99.1						Press release dated May 1, 2023.

99.2						Piedmont Office Realty Trust, Inc. Quarterly Supplemental Information for the First Quarter 2023.

104						Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized.

Piedmont Office Realty Trust, Inc.

(Registrant)

Dated:

May 1, 2023

By:

/s/ Robert E. Bowers

Robert E. Bowers

Chief Financial Officer and Executive Vice President

Document

EXHIBIT 99.1

https://cdn.kscope.io/ccbc4317f7b5d7f758bbfdbbc5ed3e1a-image1a.jpg

Piedmont Office Realty Trust Reports First Quarter 2023 Results

ATLANTA, May 1, 2023--Piedmont Office Realty Trust, Inc. ("Piedmont" or the "Company") (NYSE:PDM), an owner of Class A office properties located primarily in major U.S. Sunbelt markets, today announced its results for the quarter ended March 31, 2023.

Highlights for the Three Months Ended March 31, 2023:

Financial Results:


	Three Months Ended
(in 000s other than per share amounts )	March 31, 2023	March 31, 2022
Net income/(loss) applicable to Piedmont	$(1,367)	$59,964
Net income/(loss) per share applicable to common stockholders - diluted	$(0.01)	$0.49
Gain on sale of real estate assets	$0	$50,673

Interest expense	$22,077	$13,898
Core Funds From Operations ("Core FFO") applicable to common stock	$56,344	$62,863
Core FFO per diluted share	$0.46	$0.51


Adjusted Funds From Operations applicable to common stock	$36,792	$38,576

•Net loss applicable to Piedmont for the three months ended March 31, 2023 was $1.4 million, as compared to net income applicable to Piedmont of $60.0 million for the three months ended March 31, 2022.

•The results for the first quarter of 2023 did not include any gain on sale of real estate assets; the results for the first quarter of 2022 included an approximate $50.7 million gain on sale of real estate assets.

•Core FFO, which removes the impact of the gain on sale of real estate assets mentioned above, as well as depreciation and amortization expense, was $0.46 per diluted share for the first quarter of 2023, as compared to $0.51 per diluted share for the first quarter of 2022. The $.05 per diluted share decrease was primarily attributable to an $8.2 million, or $.07 per diluted share, increase in interest expense during the first quarter of 2023, and was partially offset by continued growth in Property Net Operating Income, as compared to the first quarter of 2022.

Leasing:


	Three Months Ended March 31, 2023
# of lease transactions	46
Total leasing sf	543,560
New tenant leasing sf	269,554
Cash rent roll up	5.7	%
Accrual rent roll up	9.9	%
Leased Percentage as of period end	86.1	%

•The Company completed approximately 544,000 square feet of leasing transactions during the first quarter, half of which, or 270,000 square feet, was for new tenant leasing, the largest quarterly amount of new tenant leasing since 2018.

•The average size lease executed during the first quarter of 2023 was approximately 12,000 square feet and the weighted average lease term was approximately eight years.

•The two largest leases completed during the quarter were both for new tenants in the Company's Dallas portfolio:

◦An energy company leased approximately 70,000 square feet through 2035 at Las Colinas Corporate Center I; and

◦A logistics company leased approximately 58,000 square feet through 2035 at One Galleria Tower.

•Cash and accrual basis rents on leases executed during the quarter ended March 31, 2023 for space vacant one year or less increased approximately 6% and 10%, respectively.

•The Company's scheduled lease expirations for the remainder of 2023 represent less than 5% of its annualized lease revenue.

•During the first quarter of 2023, Same Store NOI - Cash decreased 1.5% due to timing of leases representing approximately 2% of the Company's annualized lease revenue expiring, combined with an approximately 600,000 square foot increase in executed leases for vacant space yet to commence or under rental abatement as compared to the first quarter of 2022.

•As of March 31, 2023, the Company had approximately 1.3 million square feet of executed leases for vacant space yet to commence or under rental abatement, representing approximately $40 million of future additional annual cash revenue. Consequently, the Company estimates Same Store NOI, on both a cash and accrual basis, will increase approximately 1-3% on an annual basis in 2023.

•The Company's leased percentage as of March 31, 2023 was 86.1%, down slightly from 86.7% at December 31, 2022 due to expirations during the first quarter of 2023 noted above; however, the Company affirms its previous estimate of its year end leased percentage between 87-88%.

•The Company has executed over 200,000 square feet of total leasing thus far in the second quarter of 2023, including approximately 125,000 square feet of new tenant leasing.

Balance Sheet:


(in 000s except for ratios)	March 31, 2023		December 31, 2022
Cash and Cash Equivalents	$170,593		$16,536
Total Real Estate Assets	$3,486,797		$3,500,624
Total Assets	$4,237,460		$4,085,525


Total Debt	$2,197,955		$1,983,681
Weighted Average Cost of Debt	4.13	%	3.89	%
Debt-to-Gross Assets Ratio	40.4	%	37.6	%
Net Debt-to-Gross Assets less Cash and Cash Equivalents Ratio	38.5	%	37.4	%
Average Net Debt-to-Core EBITDA (ttm)	6.1 x		6.0 x

•As previously announced, during the three months ended March 31, 2023, the Company entered into a new $215 million term loan facility priced at adjusted SOFR + 105 bps with a final extended maturity date of January 31, 2025. The Company plans to use the proceeds from the facility, along with a combination of other cash on hand, potential proceeds from select property dispositions, and/or draws on its $600 million line of credit to repay its $350 million in Unsecured Senior Notes that mature in June 2023.

ESG and Operations:

•During the first quarter, Piedmont was named a 2023 ENERGY STAR Partner of the Year, marking the third consecutive year that Piedmont has attained this designation. The Company's most recent annual ESG Report, which includes Sustainability Accounting Standards Board (SASB) metrics and information that aligns with the Task Force on Climate-related Financial Disclosures (TCFD) framework, is available on the Company's website at www.piedmontreit.com/ESG.

•Two of the Company's Minneapolis properties, Norman Pointe I and US Bancorp Center, and one of the Company's Boston properties, 25 Burlington Mall Road, won regional The Outstanding Building of the Year ("TOBY") awards. The award is presented by the Building Owners and Managers Association ("BOMA") and recognizes excellence in building management.

Commenting on first quarter results, Brent Smith, Piedmont's President and Chief Executive Officer, said, "Last year’s leasing momentum has continued into 2023 with over 500,000 square feet of leasing during the first quarter, including the most quarterly new tenant leasing Piedmont has achieved since 2018. While the office sector is undoubtedly facing headwinds, the demand for well-amenitized, well-located space owned by financially stable landlords remains strong, particularly in our Sunbelt markets. Top-tier office properties in their respective submarkets continue to garner outsized demand and the “flight-to-quality” we’re witnessing in the marketplace now encompasses a landlord’s financial stability along with the building’s physical characteristics. Piedmont continues to differentiate its workplace offering to drive leasing velocity and actively gain market share. Additionally, in the first quarter we increased financial liquidity ahead of our near-term bond maturity with the issuance of a new unsecured term loan, a testament to the strength of our balance sheet and the depth of our banking relationships. Last, I’m proud to share that Piedmont was honored as an ENERGY STAR Partner of the Year, making this our third consecutive year for the achievement and recognizing our commitment to maintaining sustainable, wellness-oriented, working environments."

Second Quarter 2023 Dividend

On May 1, 2023, the board of directors of Piedmont declared a dividend for the second quarter of 2023 in the amount of $0.21 per share on its common stock to stockholders of record as of the close of business on May 26, 2023, payable on June 16, 2023.

Guidance for 2023

After considering year to date results and updated projections, the Company affirms its previously issued guidance for the year ending December 31, 2023 as follows:



(in millions, except per share data)	Low		High
Net income/(loss)	$	(1)	$1
Add:
Depreciation	144		151
Amortization	80		84


Core FFO applicable to common stock	$223		$236
Core FFO applicable to common stock per diluted share	$1.80		$1.90

Executed leasing activity for 2023 is estimated to be in the range of 1.6 to 2.0 million square feet with year-end leased percentage anticipated to be between 87-88%, before the impacts of acquisition and disposition activity.

This guidance is based on information available to management as of the date of this release and reflects management's view of current market conditions. No speculative acquisitions or dispositions are included in the above guidance. The Company will adjust guidance throughout the year as such transactions occur, and as new debt agreements are completed, if interest rates differ from current assumptions.

Note that actual results could differ materially from these estimates and individual quarters may fluctuate on both a cash basis and an accrual basis due to the timing of any future dispositions, significant lease commencements and expirations, abatement periods, repairs and maintenance expenses, capital expenditures, capital markets activities, seasonal general and administrative expenses, accrued potential performance-based compensation expense, one-time revenue or expense events, and other factors discussed under "Forward Looking Statements" below.

Non-GAAP Financial Measures

To supplement the presentation of the Company’s financial results prepared in accordance with U.S. generally accepted accounting principles ("GAAP"), this release and the accompanying quarterly supplemental information as of and for the period ended March 31, 2023 contain certain financial measures that are not prepared in accordance with GAAP, including FFO, Core FFO, AFFO, Same Store NOI (cash and accrual basis), Property NOI (cash and accrual basis), EBITDAre, and Core EBITDA. Definitions and reconciliations of each of these non-GAAP measures to their most comparable GAAP metrics are included below and in the accompanying quarterly supplemental information.

Each of the non-GAAP measures included in this release and the accompanying quarterly supplemental financial information has limitations as an analytical tool and should not be considered in isolation or as a substitute for an analysis of the Company’s results calculated in accordance with GAAP. In addition,

because not all companies use identical calculations, the Company’s presentation of non-GAAP measures in this release and the accompanying quarterly supplemental information may not be comparable to similarly titled measures disclosed by other companies, including other REITs. The Company may also change the calculation of any of the non-GAAP measures included in this news release and the accompanying supplemental financial information from time to time in light of its then existing operations.

Conference Call Information

Piedmont has scheduled a conference call and an audio web cast for Tuesday, May 2, 2023 at 9:00 A.M. Eastern time. The live, listen-only, audio web cast of the call may be accessed on the Company's website at http://investor.piedmontreit.com/news-and-events/events-calendar. Dial-in numbers for analysts who plan to actively participate in the call are (888) 506-0062 for participants in the United States and Canada and (973) 528-0011 for international participants. Participant Access Code is 348299. A replay of the conference call will be available through May 16, 2023, and may be accessed by dialing (877) 481-4010 for participants in the United States and Canada and (919) 882-2331 for international participants, followed by conference identification code 48117. A web cast replay will also be available after the conference call in the Investor Relations section of the Company's website. During the audio web cast and conference call, the Company's management team will review first quarter 2023 performance, discuss recent events, and conduct a question-and-answer period.

Supplemental Information

Quarterly supplemental information as of and for the period ended March 31, 2023 can be accessed on the Company`s website under the Investor Relations section at www.piedmontreit.com.

About Piedmont Office Realty Trust

Piedmont Office Realty Trust, Inc. (NYSE: PDM) is an owner, manager, developer, redeveloper, and operator of high-quality, Class A office properties located primarily in major U.S. Sunbelt markets. Its approximately $5 billion portfolio is currently comprised of approximately 17 million square feet. The Company is a fully integrated, self-managed real estate investment trust (REIT) with local management offices in each of its markets and is investment-grade rated by S&P Global Ratings (BBB) and Moody’s (Baa2). Piedmont is a 2023 ENERGY STAR Partner of the Year. For more information, see www.piedmontreit.com.

Forward-Looking Statements

Certain statements contained in this press release 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"). The Company intends 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 known and unknown risks and uncertainties, which could cause actual results to differ materially from those anticipated. Therefore, such statements are not intended to be a guarantee of the Company`s performance in future periods. Such forward-looking statements can generally be identified by the Company's use of forward-looking terminology such as "may," "will," "expect," "intend," "anticipate," "estimate," "believe," "continue" or similar words or

phrases that indicate predictions of future events or trends or that do not relate solely to historical matters. Examples of such statements in this press release include the Company's estimated range of Net Income/(Loss), Depreciation, Amortization, Core FFO and Core FFO per diluted share, leasing activity, leased percentage, and estimated increase in Same Store NOI for the year ending December 31, 2023. These statements are based on beliefs and assumptions of Piedmont’s management, which in turn are based on information available at the time the statements are made.

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: economic, regulatory, socio-economic (including work from home), technological (e.g. Metaverse, Zoom, etc), and other changes that impact the real estate market generally, the office sector or the patterns of use of commercial office space in general, or the markets where we primarily operate or have high concentrations of annualized lease revenue; the impact of competition on our efforts to renew existing leases or re-let space on terms similar to existing leases; lease terminations, lease defaults, lease contractions, or changes in the financial condition of our tenants, particularly by one of our large lead tenants; impairment charges on our long-lived assets or goodwill resulting therefrom; the success of our real estate strategies and investment objectives, including our ability to implement successful redevelopment and development strategies or identify and consummate suitable acquisitions and divestitures; the illiquidity of real estate investments, including economic changes, such as rising interest rates, which could impact the number of buyers/sellers of our target properties, and regulatory restrictions to which real estate investment trusts ("REITs") are subject and the resulting impediment on our ability to quickly respond to adverse changes in the performance of our properties; the risks and uncertainties associated with our acquisition and disposition of properties, many of which risks and uncertainties may not be known at the time of acquisition or disposition; development and construction delays, including the potential of supply chain disruptions, and resultant increased costs and risks; future acts of terrorism, civil unrest, or armed hostilities in any of the major metropolitan areas in which we own properties, or future cybersecurity attacks against any of our properties or our tenants; risks related to the occurrence of cyber incidents, or a deficiency in our cybersecurity, which could negatively impact our business by causing a disruption to our operations, a compromise or corruption of our confidential information, and/or damage to our business relationships; costs of complying with governmental laws and regulations, including environmental standards imposed on office building owners; uninsured losses or losses in excess of our insurance coverage, and our inability to obtain adequate insurance coverage at a reasonable cost; additional risks and costs associated with directly managing properties occupied by government tenants, such as potential changes in the political environment, a reduction in federal or state funding of our governmental tenants, or an increased risk of default by government tenants during periods in which state or federal governments are shut down or on furlough; significant price and volume fluctuations in the public markets, including on the exchange which we listed our common stock; risks associated with incurring mortgage and other indebtedness, including changing capital reserve requirements on our lenders and rapidly rising interest rates in the public bond markets, could impact our ability to finance properties or refinance existing debt or significantly increase operating/financing costs; a downgrade in our credit rating could materially adversely affect our business and financial condition; the effect of future offerings of debt or equity securities on the value of our common stock; additional risks and costs associated with inflation and continuing increases in the rate of inflation, including the possibility of a recession that could negatively impact our operations and the operations of our tenants and their ability to pay rent; uncertainties associated with environmental and regulatory matters; changes in the financial condition of our tenants directly or indirectly resulting from geopolitical developments that could negatively affect important supply chains and international trade, the termination or threatened termination of existing international trade agreements, or the implementation of tariffs or retaliatory tariffs on imported or exported goods; the effect of any litigation to which we are, or may become, subject;

additional risks and costs associated with owning properties occupied by tenants in particular industries, such as oil and gas, hospitality, travel, co-working, etc., including risks of default during start-up and during economic downturns; changes in tax laws impacting REITs and real estate in general, as well as our ability to continue to qualify as a REIT under the Internal Revenue Code of 1986, as amended, or other tax law changes which may adversely affect our stockholders; the future effectiveness of our internal controls and procedures; actual or threatened public health epidemics or outbreaks, such as the COVID-19 pandemic, as well as governmental and private measures taken to combat such health crises, could have a material adverse effect on our business operations and financial results; the adequacy of our general reserve related to tenant lease-related assets or the establishment of any other reserve in the future; and other factors, including the risk factors discussed under Item 1A. of Piedmont’s Annual Report on Form 10-K for the year ended December 31, 2022 and Quarterly Report on Form 10-Q for the three months ended March 31, 2023.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company cannot guarantee the accuracy of any such forward-looking statements contained in this press release, and the Company does not intend to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Research Analysts/ Institutional Investors Contact:

Eddie Guilbert

770-418-8592

research.analysts@piedmontreit.com

Shareholder Services/Transfer Agent Services Contact:

Computershare, Inc.

866-354-3485

investor.services@piedmontreit.com


Piedmont Office Realty Trust, Inc.
Consolidated Balance Sheets (Unaudited)
(in thousands)

	March 31, 2023		December 31, 2022
Assets:
Real estate assets, at cost:
Land	$	567,244	$	567,244
Buildings and improvements	3,714,572		3,682,000
Buildings and improvements, accumulated depreciation	(947,209)		(915,010)
Intangible lease assets	190,180		205,074
Intangible lease assets, accumulated amortization	(83,997)		(90,694)
Construction in progress	46,007		52,010


Total real estate assets	3,486,797		3,500,624
Cash and cash equivalents	170,593		16,536
Tenant receivables	6,280		4,762
Straight line rent receivables	176,320		172,019

Restricted cash and escrows	4,183		3,064
Prepaid expenses and other assets	26,810		17,152
Goodwill	82,937		82,937
Interest rate swaps	2,899		4,183
Deferred lease costs	486,694		505,979
Deferred lease costs, accumulated depreciation	(206,053)		(221,731)


Total assets	$	4,237,460	$	4,085,525
Liabilities:
Unsecured debt, net of discount and unamortized debt issuance costs of $14,045 and $13,319, respectively	$	2,000,955	$	1,786,681
Secured Debt	197,000		197,000
Accounts payable, accrued expenses, and accrued capital expenditures	98,464		110,306
Dividends payable	—		25,357
Deferred income	67,056		59,977
Intangible lease liabilities, less accumulated amortization	53,494		56,949
Interest rate swaps	394		—

Total liabilities	2,417,363		2,236,270
Stockholders' equity:
Common stock (123,642,953 and 123,439,558 shares outstanding as of March 31, 2023 and December 31, 2022, respectively)	1,236		1,234
Additional paid in capital	3,710,767		3,711,005
Cumulative distributions in excess of earnings	(1,883,225)		(1,855,893)
Other comprehensive income	(10,266)		(8,679)
Piedmont stockholders' equity	1,818,512		1,847,667
Noncontrolling interest	1,585		1,588

Total stockholders' equity	1,820,097		1,849,255
Total liabilities and stockholders' equity	$	4,237,460	$	4,085,525

Net debt (Unsecured and Secured Debt less Cash and cash equivalents)	2,027,362		1,967,145
Total Principal Amount of Debt Outstanding (Unsecured and Secured Debt plus discounts and unamortized debt issuance costs)	2,212,000		1,997,000


Piedmont Office Realty Trust, Inc.
Consolidated Statements of Operations
Unaudited (in thousands, except for per share data)

	Three Months Ended
	3/31/2023		3/31/2022
Revenues:


Rental and tenant reimbursement revenue	$	136,829	$	131,912
Property management fee revenue	507		651
Other property related income	5,031		3,586
Total revenues	142,367		136,149
Expenses:
Property operating costs	57,791		53,622
Depreciation	35,797		31,515
Amortization	22,031		22,252

General and administrative	7,691		7,595
Total operating expenses	123,310		114,984

Other income (expense):
Interest expense	(22,077)		(13,898)
Other income	1,656		2,024



Gain on sale of real estate assets	—		50,673

Total other income (expense)	(20,421)		38,799
Net income/(loss)	(1,364)		59,964





Net income applicable to noncontrolling interest	(3)		—
Net income/(loss) applicable to Piedmont	$	(1,367)	$	59,964
Weighted average common shares outstanding - diluted	123,550		123,510



Net income/(loss) per share applicable to common stockholders - diluted	$	(0.01)	$	0.49


Piedmont Office Realty Trust, Inc.
Funds From Operations, Core Funds From Operations and Adjusted Funds From Operations
Unaudited (in thousands, except for per share data)

	Three Months Ended
	3/31/2023			3/31/2022
GAAP net income/(loss) applicable to common stock	$	(1,367)		$	59,964
Depreciation of real estate assets(1)	35,690			31,332
Amortization of lease-related costs	22,021			22,240

Gain on sale of real estate assets	—			(50,673)
NAREIT Funds From Operations and Core Funds From Operations applicable to common stock*	56,344			62,863





Amortization of debt issuance costs and discounts on debt	1,239			778
Depreciation of non real estate assets	97			173
Straight-line effects of lease revenue	(3,187)			(2,577)
Stock-based compensation adjustments	183			(552)
Amortization of lease-related intangibles	(3,412)			(3,162)
Non-incremental capital expenditures(2)	(14,472)			(18,947)
Adjusted Funds From Operations applicable to common stock*	$	36,792		$	38,576
Weighted average common shares outstanding - diluted	123,690		(3)	123,510
NAREIT Funds From Operations and Core Funds From Operations per share (diluted)	$	0.46		$	0.51

(1)Excludes depreciation of non real estate assets.

(2)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. Tenant improvements, leasing commissions, building capital and deferred lease incentives incurred to lease space that was vacant at acquisition, leasing costs for spaces vacant for greater than one year, leasing costs for spaces at newly acquired properties for which in-place leases expire shortly after acquisition, improvements associated with the expansion of a building and renovations that either enhance the rental rates of a building or change the property’s underlying classification, such as from a Class B to a Class A property, are excluded from this measure.

(3)Includes potential dilution under the treasury stock method that would occur if our remaining unvested and potential stock awards vested and resulted in additional common shares outstanding. Such shares are not included when calculating net loss per diluted share applicable to Piedmont for the three months ended March 31, 2023 as they would reduce the loss per share presented.


Piedmont Office Realty Trust, Inc.
EBITDAre, Core EBITDA, Property Net Operating Income (Cash and Accrual), Same Store Net Operating Income (Cash and Accrual)
Unaudited (in thousands)

	Cash Basis				Accrual Basis
	Three Months Ended				Three Months Ended
	3/31/2023		3/31/2022		3/31/2023			3/31/2022

Net income/(loss) applicable to Piedmont (GAAP)	$	(1,367)	$	59,964	$	(1,367)		$	59,964
Net income applicable to noncontrolling interest	3		—		3			—
Interest expense	22,077		13,898		22,077			13,898
Depreciation	35,787		31,505		35,787			31,505
Amortization	22,021		22,240		22,021			22,240
Depreciation and amortization attributable to noncontrolling interests	20		22		20			22

Gain on sale of real estate assets	—		(50,673)		—			(50,673)
EBITDAre* and Core EBITDA*	78,541		76,956		78,541			76,956


General & administrative expenses	7,691		7,595		7,691			7,595
Management fee revenue	(293)		(362)		(293)			(362)
Other income	(1,440)		(1,808)		(1,440)			(1,808)
Reversal of non-cash general reserve for uncollectible accounts	(400)		—
Straight line effects of lease revenue	(3,187)		(2,577)
Straight line effects of lease revenue attributable to noncontrolling interests	(4)		(1)
Amortization of lease-related intangibles	(3,412)		(3,162)
Property NOI*	77,496		76,641		84,499			82,381
Net operating (income)/loss from:
Acquisitions	(5,073)		—		(7,368)			—
Dispositions	25		(3,080)		25			(3,161)
Other investments(1)	164		189		62			247
Same Store NOI*	$	72,612	$	73,750	$	77,218		$	79,467
Change period over period in Same Store NOI	(1.5)%		N/A		(2.8)		%	N/A

(1)Other investments consist of our investments in active, out-of-service redevelopment and development projects, land, and recently completed redevelopment and development projects. The operating results of 222 South Orange Avenue in Orlando, FL, are included in this line item.

*Definitions:

Funds From Operations ("FFO"): The Company calculates FFO in accordance with the current National Association of Real Estate Investment Trusts (“NAREIT”) definition. NAREIT currently defines FFO as net income/(loss) (calculated in accordance with GAAP), excluding depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, gains and losses from change in control, and impairment write-downs of certain real estate assets and investment in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity, along with appropriate adjustments to those reconciling items for joint ventures, if any. These adjustments can vary among owners of identical assets in similar conditions based on historical cost accounting and useful-life estimates. FFO is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of the Company’s operating performance. The Company believes that FFO is helpful to investors as a supplemental performance measure because it excludes the effects of depreciation, amortization and gains or losses from sales of real estate, all of which are based on historical costs, which implicitly assumes that the value of real estate diminishes predictably over time. The Company also believes that FFO can help facilitate comparisons of operating performance between periods and with other REITs. However, other REITs may not define FFO in accordance with the NAREIT definition, or may interpret the current NAREIT definition differently than the Company; therefore, the Company’s computation of FFO may not be comparable to that of such other REITs.

Core Funds From Operations ("Core FFO"): The Company calculates Core FFO by starting with FFO, as defined by NAREIT, and adjusting for gains or losses on the extinguishment of swaps and/or debt and any significant non-recurring items. Core FFO is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of the Company’s operating performance. The Company believes that Core FFO is helpful to investors as a supplemental performance measure because it excludes the effects of certain infrequent or non-recurring items which can create significant earnings volatility, but which do not directly relate to the Company’s core business operations. As a result, the Company believes that Core FFO can help facilitate comparisons of operating performance between periods and provides a more meaningful predictor of future earnings potential. Other REITs may not define Core FFO in the same manner as the Company; therefore, the Company’s computation of Core FFO may not be comparable to that of other REITs.

Adjusted Funds From Operations ("AFFO"): The Company calculates AFFO by starting with Core FFO and adjusting for non-incremental capital expenditures and then adding back non-cash items including: non-real estate depreciation, straight-lined rents and fair value lease adjustments, non-cash components of interest expense and compensation expense, and by making similar adjustments for joint ventures, if any. AFFO is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of the Company’s operating performance. The Company believes that AFFO is helpful to investors as a meaningful supplemental comparative performance measure of our ability to make incremental capital investments. Other REITs may not define AFFO in the same manner as the Company; therefore, the Company’s computation of AFFO may not be comparable to that of other REITs.

EBITDAre: The Company calculates EBITDAre in accordance with the current National Association of Real Estate Investment Trusts (“NAREIT”) definition. NAREIT currently defines EBITDAre as net income/(loss) (computed in accordance with GAAP) adjusted for gains or losses from sales of property, impairment losses, depreciation on real estate assets, amortization on real estate assets, interest expense and taxes, along with the same adjustments for joint ventures. Some of the adjustments mentioned can vary among owners of identical assets in similar conditions based on historical cost accounting and useful-life estimates. EBITDAre is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of the Company’s operating performance. The Company believes that EBITDAre is helpful to investors as a supplemental performance measure because it provides a metric for understanding the Company’s results from ongoing operations without taking into account the effects of non-cash expenses (such as depreciation and amortization) and capitalization and capital structure expenses (such as interest expense and taxes). The Company also believes that EBITDAre can help facilitate comparisons of operating performance between periods and with other REITs. However, other REITs may not define EBITDAre in accordance with the NAREIT definition, or may interpret the current NAREIT definition differently than the Company; therefore, the Company’s computation of EBITDAre may not be comparable to that of such other REITs.

Core EBITDA: The Company calculates Core EBITDA as net income/(loss) (computed in accordance with GAAP) before interest, taxes, depreciation and amortization and removing any impairment losses, gains or losses from sales of property and other significant infrequent items that create volatility within our earnings and make it difficult to determine the earnings generated by our core ongoing business. Core EBITDA is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of the Company’s operating performance. The Company believes that Core EBITDA is helpful to investors as a supplemental performance measure because it provides a metric for understanding the performance of the Company’s results from ongoing operations without taking into account the effects of non-cash expenses (such as depreciation and amortization), as well as items that are not part of normal day-to-day operations of the Company’s business. Other REITs may not define Core EBITDA in the same manner as the Company; therefore, the Company’s computation of Core EBITDA may not be comparable to that of other REITs.

Property Net Operating Income ("Property NOI"): The Company calculates Property NOI by starting with Core EBITDA and adjusting for general and administrative expense, income associated with property management performed by Piedmont for other organizations and other income or expense items for the Company, such as interest income from loan investments or costs from the pursuit of non-consummated transactions. The Company may present this measure on an accrual basis or a cash basis. When presented on a cash basis, the effects of non-cash general reserve for uncollectible accounts, straight lined rents and fair value lease revenue are also eliminated. Property NOI is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of the Company’s operating performance. The Company believes that Property NOI is helpful to investors as a supplemental comparative performance measure of income generated by its properties alone without the administrative overhead of the Company. Other REITs may not define Property NOI in the same manner as the Company; therefore, the Company’s computation of Property NOI may not be comparable to that of other REITs.

Same Store Net Operating Income ("Same Store NOI"): The Company calculates Same Store NOI as Property NOI attributable to the properties for which the following criteria were met during the entire span of the current and prior year reporting periods: (i) they were owned, (ii) they were not under development / redevelopment, and (iii) none of the operating expenses for which were capitalized. Same Store NOI also excludes amounts attributable to land assets. The Company may present this measure on an accrual basis or a cash basis. Same Store NOI is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of the Company’s operating performance. The Company believes that Same Store NOI is helpful to investors as a supplemental comparative performance measure of the income generated from the same group of properties from one period to the next. Other REITs may not define Same Store NOI in the same manner as the Company; therefore, the Company’s computation of Same Store NOI may not be comparable to that of other REITs.

Document


			EXHIBIT 99.2

https://cdn.kscope.io/ccbc4317f7b5d7f758bbfdbbc5ed3e1a-q1_2023supplementalcover.jpg

Piedmont Office Realty Trust, Inc.

Quarterly Supplemental Information

Index


	Page		Page

Introduction		Other Investments
Corporate Data	3	Other Investments Detail	32
Investor Information	4	Supporting Information
Earnings Release	5	Definitions	33
Key Performance Indicators	8	Research Coverage	34
Financials		Non-GAAP Reconciliations	35
Balance Sheets	9	In-Service Portfolio Detail	37
Income Statements	10	Major Leases Not Yet Commenced and Major Abatements	39
Funds From Operations / Adjusted Funds From Operations	12	Risks, Uncertainties and Limitations	40
Same Store Analysis	13
Capitalization Analysis	16
Debt Summary	17
Debt Detail	18
Debt Covenant & Ratio Analysis	19
Operational & Portfolio Information - Office Property Investments
Tenant Diversification	20
Tenant Credit Rating & Lease Distribution Information	21
Leased Percentage Information	22
Rental Rate Roll Up / Roll Down Analysis	23
Lease Expiration Schedule	24
Quarterly Lease Expirations	25
Annual Lease Expirations	26
Contractual Tenant Improvements & Leasing Commissions	27
Geographic Diversification	28
Geographic Diversification by Location Type	29
Industry Diversification	30
Property Investment Activity	31


Notice to Readers:
Please refer to page 40 for a discussion of important risks related to the business of Piedmont Office Realty Trust, Inc., as well as an investment in its securities, including risks that could cause actual results and events to differ materially from results and events referred to in the forward-looking information. Considering these risks, uncertainties, assumptions, and limitations, the forward-looking statements about leasing, financial operations, leasing prospects, acquisitions, dispositions, etc. contained in this quarterly supplemental information report may differ from actual results.
Certain prior period amounts have been reclassified to conform to the current period financial statement presentation. In addition, many of the schedules herein contain rounding to the nearest thousands or millions and, therefore, the schedules may not total due to this rounding convention.
To supplement the presentation of the Company’s financial results prepared in accordance with U.S. generally accepted accounting principles (GAAP), this report contains certain financial measures that are not prepared in accordance with GAAP, including FFO, Core FFO, AFFO, Same Store NOI, Property NOI, EBITDAre and Core EBITDA. Definitions and reconciliations of these non-GAAP measures to their most comparable GAAP metrics are included beginning on page 33. Each of the non-GAAP measures included in this report has limitations as an analytical tool and should not be considered in isolation or as a substitute for an analysis of the Company’s results calculated in accordance with GAAP. In addition, because not all companies use identical calculations, the Company’s presentation of non-GAAP measures in this report may not be comparable to similarly titled measures disclosed by other companies, including other REITs. The Company may also change the calculation of any of the non-GAAP measures included in this report from time to time in light of its then existing operations.

Piedmont Office Realty Trust, Inc.

Corporate Data

Piedmont Office Realty Trust, Inc. (also referred to herein as "Piedmont" or the "Company") (NYSE: PDM) is an owner, manager, developer, redeveloper and operator of high-quality, Class A office properties located primarily in major U.S. Sunbelt markets. The Company is a fully-integrated, self-managed real estate investment trust ("REIT") with local management offices in each of its markets and is investment-grade rated by Standard & Poor’s and Moody’s. The Company was designated an Energy Star Partner of the Year for 2021, 2022 and 2023, and it was the only office REIT headquartered in the Southeast to receive those designations. Currently, approximately 87% of the Company's square footage is Energy Star certified and approximately 59% is LEED certified. Piedmont is headquartered in Atlanta, GA.

This data supplements the information provided in our reports filed with the Securities and Exchange Commission and should be reviewed in conjunction with such filings.



	As of		As of
	March 31, 2023		December 31, 2022
Number of consolidated in-service office properties (1)	51		51
Rentable square footage (in thousands) (1)	16,674		16,658
Percent leased (2)	86.1	%	86.7	%
Capitalization (in thousands):
Total debt - GAAP	$2,197,955		$1,983,681
Total principal amount of debt outstanding (excludes premiums, discounts, and deferred financing costs)	$2,212,000		$1,997,000
Equity market capitalization (3)	$902,594		$1,131,941
Total market capitalization (3)	$3,114,594		$3,128,941
Total principal amount of debt / Total market capitalization (3)	71.0	%	63.8	%
Average net principal amount of debt to Core EBITDA - quarterly (4)	6.3 x		6.4 x
Average net principal amount of debt to Core EBITDA - trailing twelve months (5)	6.1 x		6.0 x
Total principal amount of debt / Total gross assets (6)	40.4	%	37.6	%
Net principal amount of debt / Total gross assets less cash and cash equivalents (7)	38.5	%	37.4	%
Common stock data:
High closing price during quarter	$11.02		$10.92
Low closing price during quarter	$6.53		$8.80
Closing price of common stock at period end	$7.30		$9.17
Weighted average fully diluted shares outstanding during quarter (in thousands)	123,690		123,633
Shares of common stock issued and outstanding at period end (in thousands)	123,643		123,440
Annual regular dividend per share (8)	$0.84		$0.84
Ratings (Standard & Poor's / Moody's)	BBB / Baa2		BBB / Baa2
Employees	148		149


(1)			As of March 31, 2023, our consolidated office portfolio consisted of 51 properties (exclusive of one 127,000 square foot property that was out of service for redevelopment, 222 South Orange Avenue in Orlando, FL).
(2)			Calculated as square footage associated with commenced leases plus square footage associated with executed but uncommenced leases for vacant spaces at our in-service properties, divided by total rentable in-service square footage, all as of the relevant date, expressed as a percentage. Please refer to page 22 for additional analyses regarding Piedmont's leased percentage.
(3)			Reflects common stock closing price, shares outstanding and principal amount of debt outstanding as of the end of the reporting period, as appropriate.
(4)			For the purposes of this calculation, we annualize the Core EBITDA for the quarter and use the average daily principal balance of debt outstanding during the quarter, less cash and cash equivalents and escrow deposits and restricted cash as of the end of the quarter.
(5)			For the purposes of this calculation, we use the sum of Core EBITDA for the trailing four quarters and the average daily principal balance of debt outstanding for the trailing four quarters, less the average of cash and cash equivalents and escrow deposits and restricted cash as of the end of each quarter in the trailing four quarter period.
(6)			Total gross assets is defined as total assets with the add-back of accumulated depreciation and accumulated amortization related to real estate assets and accumulated amortization related to deferred lease costs.
(7)			Due to the large amount of cash investments set aside for debt retirement as of March 31, 2023, we have provided this metric. For this metric, we start with the total principal amount of debt to gross assets ratio and then deduct cash and cash equivalents from both the numerator (principal amount of debt) and the denominator (total gross assets) to provide an estimation of the total principal amount of debt to gross assets ratio if cash on hand were immediately used to reduce our outstanding debt balances.
(8)			Total of the regular dividends per share for which record dates occurred over the last four quarters.

Piedmont Office Realty Trust, Inc.

Investor Information


Corporate
5565 Glenridge Connector, Suite 450
Atlanta, Georgia 30342
770.418.8800
www.piedmontreit.com


Executive Management

C. Brent Smith	Robert E. Bowers	George Wells
Chief Executive Officer, President	Chief Financial and Administrative Officer	Chief Operating Officer and
and Director	and Executive Vice President	Executive Vice President

Kevin D. Fossum	Edward H. Guilbert, III	Christopher A. Kollme	Damian J. Miller
Executive Vice President,	Executive Vice President, Finance,	Executive Vice President,	Executive Vice President,
Property Management	Assistant Secretary and Treasurer	Investments	Dallas
	Investor Relations Contact

Laura P. Moon	Alex Valente	Robert K. Wiberg
Chief Accounting Officer and	Executive Vice President,	Executive Vice President,
Senior Vice President	Southeast Region	Northeast Region and Co-Head of
		Development

Board of Directors

Frank C. McDowell	Dale H. Taysom	Kelly H. Barrett	Glenn G. Cohen
Director, Chair of the Board of Directors, and	Director, Vice Chair of the	Director, Chair of the Audit Committee,	Director, Chair of the Compensation
Member of the Compensation and Governance	Board of Directors, and Member of the	and Member of the Governance Committee	Committee, and Member of the Audit
Committees	Audit and Capital Committees		and Capital Committees

Venkatesh S. Durvasula	Mary Hager	Barbara B. Lang	C. Brent Smith
Director and Member of the Capital Committee	Director and Member of the	Director, Chair of the Governance Committee	Chief Executive Officer, President
	Governance Committee	(including ESG), and Member of the	and Director
		Compensation Committee
Jeffrey L. Swope
Director, Chair of the Capital
Committee, and Member of the
Compensation Committee


Transfer Agent	Corporate Counsel	Institutional Analyst Contact	Investor Relations

Computershare	King & Spalding	Phone: 770.418.8592	Phone: 866.354.3485
P.O. Box 43006	1180 Peachtree Street, NE	research.analysts@piedmontreit.com	investor.services@piedmontreit.com
Providence, RI 02940-3078	Atlanta, GA 30309		www.piedmontreit.com
Phone: 866.354.3485	Phone: 404.572.4600

Piedmont Office Realty Trust, Inc.

Earnings Release

Piedmont Office Realty Trust Reports First Quarter 2023 Results

Highlights for the Three Months Ended March 31, 2023:

Financial Results:


	Three Months Ended
(in 000s other than per share amounts)	March 31, 2023	March 31, 2022
Net income/(loss) applicable to Piedmont	$(1,367)	$59,964
Net income/(loss) per share applicable to common stockholders - diluted	$(0.01)	$0.49
Gain on sale of real estate assets	$0	$50,673

Interest expense	$22,077	$13,898
Core Funds From Operations ("Core FFO") applicable to common stock	$56,344	$62,863
Core FFO per diluted share	$0.46	$0.51


Adjusted Funds From Operations applicable to common stock	$36,792	$38,576

Leasing:


	Three Months Ended March 31, 2023
# of lease transactions	46
Total leasing sf	543,560
New tenant leasing sf	269,554
Cash rent roll up	5.7	%
Accrual rent roll up	9.9	%
Leased percentage as of period end	86.1	%

•The average size lease executed during the first quarter of 2023 was approximately 12,000 square feet and the weighted average lease term was approximately eight years.

•The two largest leases completed during the quarter were both for new tenants in the Company's Dallas portfolio:

◦An energy company leased approximately 70,000 square feet through 2035 at Las Colinas Corporate Center I; and

◦A logistics company leased approximately 58,000 square feet through 2035 at One Galleria Tower.

•Cash and accrual basis rents on leases executed during the quarter ended March 31, 2023 for space vacant one year or less increased approximately 6% and 10%, respectively.

•The Company's scheduled lease expirations for the remainder of 2023 represent less than 5% of its annualized lease revenue.

•The Company has executed over 200,000 square feet of total leasing thus far in the second quarter of 2023, including approximately 125,000 square feet of new tenant leasing.

Balance Sheet:


(in 000s except for ratios)	March 31, 2023		December 31, 2022
Cash and Cash Equivalents	$170,593		$16,536
Total Real Estate Assets	$3,486,797		$3,500,624
Total Assets	$4,237,460		$4,085,525


Total Debt	$2,197,955		$1,983,681
Weighted Average Cost of Debt	4.13	%	3.89	%
Debt-to-Gross Assets Ratio	40.4	%	37.6	%
Net Debt-to-Gross Assets less Cash and Cash Equivalents Ratio	38.5	%	37.4	%
Average Net Debt-to-Core EBITDA (ttm)	6.1 x		6.0 x

ESG and Operations:

Second Quarter 2023 Dividend

Guidance for 2023

After considering year to date results and updated projections, the Company affirms its previously issued guidance for the year ending December 31, 2023 as follows:



(in millions, except per share data)	Low	High
Net income/(loss)	($1)	$1
Add:
Depreciation	144	151
Amortization	80	84


Core FFO applicable to common stock	$223	$236
Core FFO applicable to common stock per diluted share	$1.80	$1.90

Piedmont Office Realty Trust, Inc.

Key Performance Indicators

Unaudited (in thousands except for per share data and ratios)


This section of our supplemental report includes non-GAAP financial measures, including, but not limited to, Earnings Before Interest, Taxes, Depreciation, and Amortization for real estate (EBITDAre), Core Earnings Before Interest, Taxes, Depreciation, and Amortization (Core EBITDA), Funds from Operations (FFO), Core Funds from Operations (Core FFO), Adjusted Funds from Operations (AFFO), and Same Store Net Operating Income (Same Store NOI). Definitions of these non-GAAP measures are provided on page 33 and reconciliations are provided beginning on page 35.


	Three Months Ended


Selected Operating Data	3/31/2023		12/31/2022		9/30/2022		6/30/2022		3/31/2022

Percent leased	86.1	%	86.7	%	86.8	%	87.0	%	87.0	%
Percent leased - economic (1)	79.6	%	81.1	%	80.6	%	80.7	%	81.4	%
Total revenues	$142,367		$147,208		$144,100		$136,309		$136,149
Net income / (loss) applicable to Piedmont	-$1,367		$75,569		$3,331		$7,966		$59,964
Net income / (loss) per share applicable to common stockholders - diluted	-$0.01		$0.61		$0.03		$0.06		$0.49
Core EBITDA	$78,541		$82,186		$78,805		$75,591		$76,956
Core FFO applicable to common stock	$56,344		$61,235		$61,352		$61,620		$62,863
Core FFO per share - diluted	$0.46		$0.50		$0.50		$0.50		$0.51
AFFO applicable to common stock	$36,792		$47,082		$43,482		$48,900		$38,576
Gross regular dividends (2)	$25,965		$25,918		$25,913		$25,912		$25,899
Regular dividends per share (2)	$0.21		$0.21		$0.21		$0.21		$0.21


Same store net operating income - accrual basis (3)	-2.8	%	-0.7	%	0.3	%	2.8	%	2.5	%
Same store net operating income - cash basis (3)	-1.5	%	1.6	%	-0.3	%	1.8	%	5.1	%
Rental rate roll up / roll down - accrual rents	9.9	%	11.5	%	37.6	%	12.2	%	12.9	%
Rental rate roll up / roll down - cash rents	5.7	%	6.5	%	33.1	%	2.5	%	4.8	%
Selected Balance Sheet Data
Total real estate assets, net	$3,486,797		$3,500,624		$3,572,591		$3,139,587		$3,147,362
Total assets	$4,237,460		$4,085,525		$4,185,493		$3,695,554		$3,699,640
Total liabilities	$2,417,363		$2,236,270		$2,388,162		$1,879,891		$1,869,166
Ratios & Information for Debt Holders
Core EBITDA to total revenues	55.2	%	55.8	%	54.7	%	55.5	%	56.5	%
Fixed charge coverage ratio (4)	3.4 x		3.8 x		4.3 x		5.1 x		5.2 x
Average net principal amount of debt to Core EBITDA - quarterly (5)	6.3 x		6.4 x		6.2 x		5.5 x		5.9 x
Total gross real estate assets	$4,518,003		$4,506,328		$4,587,669		$4,117,177		$4,097,332
Total debt - GAAP	$2,197,955		$1,983,681		$2,145,408		$1,674,778		$1,669,553
Net principal amount of debt (6)	$2,037,224		$1,977,400		$2,146,156		$1,681,144		$1,672,332


(1)			Economic leased percentage excludes the square footage associated with executed but not commenced leases for currently vacant spaces and the square footage associated with tenants receiving rental abatements (after proportional adjustments for tenants receiving only partial rental abatements). Due to variations in rental abatement structures, there will be variability to the economic leased percentage over time as abatements commence and expire.
(2)			Dividends are reflected in the quarter in which the record date occurred.
(3)			Please refer to the three pages starting with page 13 for reconciliations to net income and additional same store net operating income information. The statistic provided for each of the prior quarters is based on the same store property population applicable at the time that the metric was initially reported.
(4)			The fixed charge coverage ratio is calculated as Core EBITDA divided by the sum of interest expense, principal amortization (none during periods presented), capitalized interest and preferred dividends (none during periods presented). The Company had capitalized interest of $1.2 million for the quarter ending March 31, 2023, $1.0 million for the quarter ended December 31, 2022, $1.1 million for the quarter ended September 30, 2022, $1.1 million for the quarter ended June 30, 2022, and $1.0 million for the quarter ended March 31, 2022.
(5)			For the purposes of this calculation, we annualize the Core EBITDA for the quarter and use the average daily principal balance of debt outstanding during the quarter, less cash and cash equivalents and escrow deposits and restricted cash as of the end of the quarter.
(6)			Net principal amount of debt is calculated and defined as the total principal amount of debt outstanding minus cash and cash equivalents and escrow deposits and restricted cash all as of the end of the period.

Piedmont Office Realty Trust, Inc.

Consolidated Balance Sheets

Unaudited (in thousands)


	March 31, 2023		December 31, 2022		September 30, 2022		June 30, 2022		March 31, 2022
Assets:
Real estate, at cost:
Land assets	$	567,244	$	567,244	$	578,722	$	521,789	$	521,789
Buildings and improvements	3,714,572		3,682,000		3,751,722		3,389,650		3,351,807
Buildings and improvements, accumulated depreciation	(947,209)		(915,010)		(926,357)		(892,131)		(863,306)
Intangible lease asset	190,180		205,074		212,248		164,194		173,017
Intangible lease asset, accumulated amortization	(83,997)		(90,694)		(88,721)		(85,459)		(86,664)
Construction in progress	46,007		52,010		44,977		41,544		50,719


Total real estate assets	3,486,797		3,500,624		3,572,591		3,139,587		3,147,362

Cash and cash equivalents	170,593		16,536		10,653		6,397		7,211
Tenant receivables, net of allowance for doubtful accounts	6,280		4,762		7,796		5,164		3,095
Straight line rent receivable	176,320		172,019		173,122		168,797		164,776

Escrow deposits and restricted cash	4,183		3,064		2,191		1,459		1,457
Prepaid expenses and other assets	26,810		17,152		23,925		26,955		21,318
Goodwill	82,937		82,937		98,918		98,918		98,918
Interest rate swap	2,899		4,183		3,760		996		—

Deferred lease costs, gross	486,694		505,979		510,936		459,038		466,234
Deferred lease costs, accumulated amortization	(206,053)		(221,731)		(218,399)		(211,757)		(210,731)


Total assets	$	4,237,460	$	4,085,525	$	4,185,493	$	3,695,554	$	3,699,640
Liabilities:
Unsecured debt, net of discount	$	2,000,955	$	1,786,681	$	1,948,408	$	1,674,778	$	1,669,553
Secured debt	197,000		197,000		197,000		—		—
Accounts payable, accrued expenses, and accrued capital expenditures	98,464		135,663		111,262		99,724		83,609
Deferred income	67,056		59,977		70,798		72,422		79,493
Intangible lease liabilities, less accumulated amortization	53,494		56,949		60,694		32,967		36,077
Interest rate swaps	394		—		—		—		434

Total liabilities	2,417,363		2,236,270		2,388,162		1,879,891		1,869,166
Stockholders' equity:
Common stock	1,236		1,234		1,234		1,234		1,233
Additional paid in capital	3,710,767		3,711,005		3,709,234		3,707,833		3,706,207
Cumulative distributions in excess of earnings	(1,883,225)		(1,855,893)		(1,905,544)		(1,882,962)		(1,865,016)
Other comprehensive loss	(10,266)		(8,679)		(9,194)		(12,050)		(13,573)
Piedmont stockholders' equity	1,818,512		1,847,667		1,795,730		1,814,055		1,828,851
Non-controlling interest	1,585		1,588		1,601		1,608		1,623
Total stockholders' equity	1,820,097		1,849,255		1,797,331		1,815,663		1,830,474
Total liabilities, redeemable common stock and stockholders' equity	$	4,237,460	$	4,085,525	$	4,185,493	$	3,695,554	$	3,699,640
Common stock outstanding at end of period	123,643		123,440		123,395		123,390		123,331

Piedmont Office Realty Trust, Inc.

Consolidated Statements of Income

Unaudited (in thousands except for per share data)


	Three Months Ended
	3/31/2023		12/31/2022		9/30/2022		6/30/2022		3/31/2022
Revenues:
Rental income (1)	$	112,560	$	117,148	$	114,280	$	110,244	$	109,732
Tenant reimbursements (1)	24,269		24,958		25,292		21,907		22,180
Property management fee revenue	507		395		303		326		651
Other property related income	5,031		4,707		4,225		3,832		3,586
	142,367		147,208		144,100		136,309		136,149
Expenses:
Property operating costs	57,791		59,763		59,039		53,634		53,622
Depreciation	35,797		34,788		34,941		32,372		31,515
Amortization	22,031		23,915		23,290		21,480		22,252
Impairment loss (2)	—		25,981		—		—		—
General and administrative	7,691		7,915		6,590		7,027		7,595
	123,310		152,362		123,860		114,513		114,984
Other income / (expense):
Interest expense	(22,077)		(20,739)		(17,244)		(13,775)		(13,898)
Other income / (expense)	1,656		408		335		(57)		2,024




Gain / (loss) on sale of real estate (2)	—		101,055		—		1		50,673
Net income / (loss)	(1,364)		75,570		3,331		7,965		59,964
Less: Net (income) / loss applicable to noncontrolling interest	(3)		(1)		—		1		—
Net income / (loss) applicable to Piedmont	$	(1,367)	$	75,569	$	3,331	$	7,966	$	59,964
Weighted average common shares outstanding - diluted	123,550		123,633		123,697		123,679		123,510
Net income / (loss) per share applicable to common stockholders - diluted	$	(0.01)	$	0.61	$	0.03	$	0.06	$	0.49
Common stock outstanding at end of period	123,643		123,440		123,395		123,390		123,331


(1)			The presentation method used for this line is not in conformance with GAAP. To be in conformance with the current GAAP standard, the Company would combine amounts presented on the rental income line with amounts presented on the tenant reimbursements line and present that aggregated figure on one line entitled "rental and tenant reimbursement revenue."
(2)			The gain on sale of real estate reflected in the fourth quarter of 2022 was primarily related to the sales of One Brattle Square and 1414 Massachusetts Avenue, both in Cambridge, MA. The impairment loss reflected in the fourth quarter of 2022 was related to (a) a partial write down of the Company's goodwill balance; and (b) the write down of one property. The gain on sale of real estate reflected in the first quarter of 2022 was primarily related to the sale of 225 and 235 Presidential Way in Woburn, MA.

Piedmont Office Realty Trust, Inc.

Consolidated Statements of Income

Unaudited (in thousands except for per share data)


	Three Months Ended
	3/31/2023		3/31/2022		Change ($)		Change (%)
Revenues:
Rental income (1)	$	112,560	$	109,732	$	2,828	2.6	%
Tenant reimbursements (1)	24,269		22,180		2,089		9.4	%
Property management fee revenue	507		651		(144)		(22.1)	%
Other property related income	5,031		3,586		1,445		40.3	%
	142,367		136,149		6,218		4.6	%
Expenses:
Property operating costs	57,791		53,622		(4,169)		(7.8)	%
Depreciation	35,797		31,515		(4,282)		(13.6)	%
Amortization	22,031		22,252		221		1.0	%

General and administrative	7,691		7,595		(96)		(1.3)	%
	123,310		114,984		(8,326)		(7.2)	%
Other income / (expense):
Interest expense	(22,077)		(13,898)		(8,179)		(58.9)	%
Other income / (expense)	1,656		2,024		(368)		(18.2)	%




Gain / (loss) on sale of real estate (2)	—		50,673		(50,673)		(100.0)	%
Net income / (loss)	(1,364)		59,964		(61,328)		(102.3)	%
Less: Net (income) / loss applicable to noncontrolling interest	(3)		—		(3)		(100.0)	%
Net income / (loss) applicable to Piedmont	$	(1,367)	$	59,964	$	(61,331)	(102.3)	%
Weighted average common shares outstanding - diluted	123,550		123,510
Net income / (loss) per share applicable to common stockholders - diluted	$	(0.01)	$	0.49
Common stock outstanding at end of period	123,643		123,331


(1)			The presentation method used for this line is not in conformance with GAAP. To be in conformance with the current GAAP standard, the Company would combine amounts presented on the rental income line with amounts presented on the tenant reimbursements line and present that aggregated figure on one line entitled "rental and tenant reimbursement revenue."
(2)			The gain on sale of real estate for the three months ended March 31, 2022 was primarily related to the sales of 225 and 235 Presidential Way in Woburn, MA.

Piedmont Office Realty Trust, Inc.

Funds From Operations, Core Funds From Operations and Adjusted Funds From Operations

Unaudited (in thousands except for per share data)


	Three Months Ended
	3/31/2023		3/31/2022

GAAP net income / (loss) applicable to common stock	$	(1,367)	$	59,964
Depreciation for real estate assets (1)	35,690		31,332
Amortization (1)	22,021		22,240

Loss / (gain) on sale of properties	—		(50,673)

NAREIT funds from operations and core funds from operations applicable to common stock	56,344		62,863






Adjustments:
Amortization of debt issuance costs and discounts on debt	1,239		778
Depreciation of non real estate assets	97		173
Straight-line effects of lease revenue (1)	(3,187)		(2,577)
Stock-based compensation adjustments	183		(552)
Amortization of lease-related intangibles (1)	(3,412)		(3,162)

Non-incremental capital expenditures (2)
Building/Construction/Development	(4,752)		(3,506)
Tenant Improvements	(5,699)		(11,506)
Leasing Costs	(4,021)		(3,935)
Adjusted funds from operations applicable to common stock	$	36,792	$	38,576

Weighted average common shares outstanding - diluted	123,690		123,510

Funds from operations per share (diluted)	$	0.46	$	0.51
Core funds from operations per share (diluted)	$	0.46	$	0.51

Common stock outstanding at end of period	123,643		123,331


(1)			Includes our proportionate share of amounts attributable to consolidated properties.
(2)			Non-incremental capital expenditures are defined on page 33.

Piedmont Office Realty Trust, Inc.

Same Store Net Operating Income (Cash Basis)

Unaudited (in thousands)


	Three Months Ended
	3/31/2023			3/31/2022
Net income / (loss) applicable to Piedmont	$	(1,367)		$	59,964
Net income / (loss) applicable to noncontrolling interest	3			—
Interest expense	22,077			13,898
Depreciation (1)	35,787			31,505
Amortization (1)	22,021			22,240
Depreciation and amortization attributable to noncontrolling interests	20			22

(Gain) / loss on sale of properties	—			(50,673)






EBITDAre and Core EBITDA (2)	78,541			76,956
General & administrative expenses	7,691			7,595
Non-cash general reserve for uncollectible accounts	(400)			—
Management fee revenue (3)	(293)			(362)
Other (income) / expense (1) (4)	(1,440)			(1,808)
Straight-line effects of lease revenue (1)	(3,187)			(2,577)
Straight-line effects of lease revenue attributable to noncontrolling interests	(4)			(1)
Amortization of lease-related intangibles (1)	(3,412)			(3,162)
Property net operating income (cash basis)	77,496			76,641
Deduct net operating (income) / loss from:
Acquisitions (5)	(5,073)			—
Dispositions (6)	25			(3,080)
Other investments (7)	164			189
Same store net operating income (cash basis)	$	72,612		$	73,750
Change period over period	(1.5)		%	N/A


(1)			Includes our proportionate share of amounts attributable to consolidated properties.
(2)			The Company has historically recognized approximately $2 to $3 million of termination income on an annual basis. Given the size of its asset base and the number of tenants with which it conducts business, Piedmont considers termination income of that magnitude to be a normal part of its operations and a recurring part of its revenue stream; however, the recognition of termination income is typically variable between quarters and throughout any given year and is dependent upon when during the year the Company receives termination notices from tenants. During the three months ended March 31, 2023, Piedmont recognized $0.2 million of termination income, as compared with $0.3 million during the same period in 2022 and $2.1 million during the 2022 calendar year.
(3)			Presented net of related operating expenses incurred to earn the revenue; therefore, the information presented on this line will not tie to the data presented on the income statements.
(4)			Figures presented on this line may not tie back to the relevant sources as some activity is attributable to property operations and is, therefore, presented in property net operating income.
(5)			Acquisitions includes 1180 Peachtree Street in Atlanta, GA, purchased in the third quarter of 2022.
(6)			Dispositions include Two Pierce Place in Itasca, IL and 225 and 235 Presidential Way in Woburn, MA, sold in the first quarter of 2022, and One Brattle Square and 1414 Massachusetts Avenue in Cambridge, MA, sold in the fourth quarter of 2022.
(7)			Other investments include active out-of-service redevelopment and development projects, land, and recently completed redevelopment and development projects. Additional information on our land holdings can be found on page 32.The operating results from 222 South Orange Avenue in Orlando, FL, are included in this line item.

Piedmont Office Realty Trust, Inc.

Same Store Net Operating Income (Accrual Basis)

Unaudited (in thousands)


	Three Months Ended
	3/31/2023			3/31/2022
Net income / (loss) applicable to Piedmont	$	(1,367)		$	59,964
Net income / (loss) applicable to noncontrolling interest	3			—
Interest expense	22,077			13,898
Depreciation (1)	35,787			31,505
Amortization (1)	22,021			22,240
Depreciation and amortization attributable to noncontrolling interests	20			22

(Gain) / loss on sale of properties	—			(50,673)






EBITDAre and Core EBITDA (2)	78,541			76,956
General & administrative expenses	7,691			7,595
Management fee revenue (3)	(293)			(362)
Other (income) / expense (1) (4)	(1,440)			(1,808)
Property net operating income (accrual basis)	84,499			82,381
Deduct net operating (income) / loss from:
Acquisitions (5)	(7,368)			—
Dispositions (6)	25			(3,161)
Other investments (7)	62			247
Same store net operating income (accrual basis)	$	77,218		$	79,467
Change period over period	(2.8)		%	N/A


(1)			Includes our proportionate share of amounts attributable to consolidated properties.
(2)			The Company has historically recognized approximately $2 to $3 million of termination income on an annual basis. Given the size of its asset base and the number of tenants with which it conducts business, Piedmont considers termination income of that magnitude to be a normal part of its operations and a recurring part of its revenue stream; however, the recognition of termination income is typically variable between quarters and throughout any given year and is dependent upon when during the year the Company receives termination notices from tenants. During the three months ended March 31, 2023, Piedmont recognized $0.2 million of termination income, as compared with $0.3 million during the same period in 2022 and $2.1 million during the 2022 calendar year.
(3)			Presented net of related operating expenses incurred to earn the revenue; therefore, the information presented on this line will not tie to the data presented on the income statements.
(4)			Figures presented on this line may not tie back to the relevant sources as some activity is attributable to property operations and is, therefore, presented in property net operating income.
(5)			Acquisitions includes 1180 Peachtree Street in Atlanta, GA, purchased in the third quarter of 2022.
(6)			Dispositions include Two Pierce Place in Itasca, IL and 225 and 235 Presidential Way in Woburn, MA, sold in the first quarter of 2022, and One Brattle Square and 1414 Massachusetts Avenue in Cambridge, MA, sold in the fourth quarter of 2022.
(7)			Other investments include active out-of-service redevelopment and development projects, land, and recently completed redevelopment and development projects. Additional information on our land holdings can be found on page 32. The operating results from 222 South Orange Avenue in Orlando, FL, are included in this line item.

Piedmont Office Realty Trust, Inc.

Same Store Net Operating Income (Financial Components)

Unaudited (in thousands)



		Three Months Ended
		3/31/2023		3/31/2022		Change ($)		Change (%)

Revenue
	Cash rental income	$	100,303	$	100,303	$	—	—	%
	Tenant reimbursements (1)	22,939		21,476		1,463		6.8	%
	Straight line effects of lease revenue	1,896		2,499		(603)		(24.1)	%
	Amortization of lease-related intangibles	2,310		3,218		(908)		(28.2)	%
	Total rents	127,448		127,496		(48)		—	%

	Other property related income (2)	4,609		3,776		833		22.1	%
Total revenue		132,057		131,272		785		0.6	%

Property operating expense (3)		55,055		52,021		(3,034)		(5.8)	%

Property other income / (expense)		216		216		—		—	%

Same store net operating income (accrual)		$	77,218	$	79,467	$	(2,249)	(2.8)	%

Less:
	Straight line effects of lease revenue	(1,896)		(2,499)		603		24.1	%
	Amortization of lease-related intangibles	(2,310)		(3,218)		908		28.2	%
	Non-cash general reserve for uncollectible accounts	(400)		—		(400)		(100.0)	%

Same store net operating income (cash)		$	72,612	$	73,750	$	(1,138)	(1.5)	%


(1)			The increase in tenant reimbursements for the three months ended March 31, 2023 as compared to the same period in 2022 was primarily the result of an increase in recoverable operating expenses in 2023 in comparison to 2022 due to the increased physical utilization of our buildings.
(2)			The increase in other property related income for the three months ended March 31, 2023 as compared to the same period in 2022 was primarily related to increased parking demand across the portfolio as a result of post-pandemic increased business activity.
(3)			The increase in property operating expense for the three months ended March 31, 2023 as compared to the same period in 2022 was primarily associated with increased variable operating costs as a result of increasing physical office space utilization by tenants across our portfolio.

Piedmont Office Realty Trust, Inc.

Capitalization Analysis

Unaudited (in thousands except for per share data and ratios)



	As of		As of
	March 31, 2023		December 31, 2022

Market Capitalization
Common stock price	$7.30		$9.17
Total shares outstanding	123,643		123,440
Equity market capitalization (1)	$902,594		$1,131,941
Total debt - GAAP	$2,197,955		$1,983,681
Total principal amount of debt outstanding (excludes premiums, discounts, and deferred financing costs)	$2,212,000		$1,997,000
Total market capitalization (1)	$3,114,594		$3,128,941
Total principal amount of debt / Total market capitalization (1)	71.0	%	63.8	%
Ratios & Information for Debt Holders
Total gross assets (2)	$5,474,719		$5,312,960
Total principal amount of debt / Total gross assets (2)	40.4	%	37.6	%
Net principal amount of debt / Total gross assets less cash and cash equivalents (3)	38.5	%	37.4	%
Average net principal amount of debt to Core EBITDA - quarterly (4)	6.3 x		6.4 x
Average net principal amount of debt to Core EBITDA - trailing twelve months (5)	6.1 x		6.0 x


(1)			Reflects common stock closing price, shares outstanding, and principal amount of debt outstanding as of the end of the reporting period, as appropriate.
(2)			Total gross assets is defined as total assets with the add-back of accumulated depreciation and accumulated amortization related to real estate assets and accumulated amortization related to deferred lease costs.
(3)			Due to the large amount of cash investments set aside for debt retirement as of March 31, 2023, we have provided this metric. For this metric, we start with the total principal amount of debt to gross assets ratio and then deduct cash and cash equivalents from both the numerator (principal amount of debt) and the denominator (total gross assets) to provide an estimation of the total principal amount of debt to gross assets ratio if cash on hand were immediately used to reduce our outstanding debt balances.
(4)			For the purposes of this calculation, we annualize the Core EBITDA for the quarter and use the average daily principal balance of debt outstanding during the quarter, less cash and cash equivalents and escrow deposits and restricted cash as of the end of the quarter.
(5)			For the purposes of this calculation, we use the sum of Core EBITDA for the trailing four quarters and the average daily principal balance of debt outstanding for the trailing four quarters, less the average of cash and cash equivalents and escrow deposits and restricted cash as of the end of each quarter in the trailing four quarter period.

Piedmont Office Realty Trust, Inc.

Debt Summary

As of March 31, 2023

Unaudited ($ in thousands)

Floating Rate & Fixed Rate Debt

Debt (1)

Principal Amount

Outstanding

Weighted Average Stated

Interest Rate (2)

Weighted Average

Maturity

Floating Rate

$415,000

(3)

5.93%

24.3 months

Fixed Rate

1,797,000

3.72%

46.4 months

Total

$2,212,000

4.13%

42.2 months

https://cdn.kscope.io/ccbc4317f7b5d7f758bbfdbbc5ed3e1a-chart-1c7f1a35addf4acb9b4.jpg

Unsecured & Secured Debt

Debt (1)

Principal Amount

Outstanding

Weighted Average Stated

Interest Rate (2)

Weighted Average

Maturity

Unsecured

$2,015,000

4.14%

39.9 months

Secured

197,000

4.10%

66.1 months

Total

$2,212,000

4.13%

42.2 months

https://cdn.kscope.io/ccbc4317f7b5d7f758bbfdbbc5ed3e1a-chart-9e233d5a08854c92be3.jpg


Debt Maturities (4)
Maturity Year	Secured Debt - Principal Amount Outstanding (1)	Unsecured Debt - Principal Amount Outstanding (1)	Weighted Average Stated Interest Rate (2)	Percentage of Total

2023	$—	$350,000	3.40%	15.8%
2024	—	400,000	4.45%	18.1%
2025	—	665,000	5.41%	30.0%
2026	—	—	N/A	—%
2027	—	—	N/A	—%
2028	197,000	—	4.10%	8.9%
2029	—	—	N/A	—%
2030	—	300,000	3.15%	13.6%
2031	—	—	N/A	—%
2032	—	300,000	2.75%	13.6%

Total	$197,000	$2,015,000	4.13%	100.0%

https://cdn.kscope.io/ccbc4317f7b5d7f758bbfdbbc5ed3e1a-chart-40d693ff1b1a40e6896.jpg


(1)			All of Piedmont's outstanding debt as of March 31, 2023, was interest-only debt or in an interest-only payment period.
(2)			Weighted average stated interest rate is calculated based upon the principal amounts outstanding.
(3)			The amount of floating rate debt is comprised of the entire principal balance of the $200 million unsecured term loan that closed in 2022 and the entire principal balance of the $215 million unsecured term loan that closed in 2023. There is an additional $600 million unsecured revolving credit facility which has a floating interest rate structure, but it had no outstanding balance as of March 31, 2023.
(4)			For loans which provide extension options that are conditional solely upon the Company providing proper notice to the loan's administrative agent and the payment of an extension fee, the final extended maturity date is reflected herein.

Piedmont Office Realty Trust, Inc.

Debt Detail

Unaudited ($ in thousands)


Facility (1)	Property	Stated Rate			Maturity	Principal Amount Outstanding as of March 31, 2023

Secured
$197.0 Million Fixed-Rate Mortgage	1180 Peachtree Street	4.10	%	(2)	10/1/2028	$	197,000
Subtotal / Weighted Average (3)		4.10	%			$	197,000

Unsecured
$350.0 Million Unsecured 2013 Senior Notes	N/A	3.40	%	(4)	6/1/2023	$	350,000
$400.0 Million Unsecured 2014 Senior Notes	N/A	4.45	%	(5)	3/15/2024	400,000
$215.0 Million Unsecured 2023 Term Loan (6)	N/A	5.95	%	(7)	1/31/2025	215,000
$250.0 Million Unsecured 2018 Term Loan	N/A	4.54	%	(8)	3/31/2025	250,000
$200.0 Million Unsecured 2022 Term Loan (9)	N/A	5.91	%	(10)	6/18/2025	200,000
$600.0 Million Unsecured Line of Credit (11)	N/A	—	%	(12)	6/30/2027	—
$300.0 Million Unsecured 2020 Senior Notes	N/A	3.15	%	(13)	8/15/2030	300,000
$300.0 Million Unsecured 2021 Senior Notes	N/A	2.75	%	(14)	4/1/2032	300,000
Subtotal / Weighted Average (3)		4.14	%			$	2,015,000

Total Debt - Principal Amount Outstanding / Weighted Average Stated Rate (3)		4.13	%			$	2,212,000
GAAP Accounting Adjustments (15)						(14,045)
Total Debt - GAAP Amount Outstanding						$	2,197,955


(1)			All of Piedmont’s outstanding debt as of March 31, 2023, was interest-only debt or in an interest-only payment period.
(2)			Upon acquiring 1180 Peachtree Street during the third quarter of 2022, Piedmont assumed the mortgage. The stated interest rate of the loan was estimated to be an at-market rate as of the date of closing. The loan is interest-only through September 2023; effective October 1, 2023, the loan will begin amortizing based on a 30-year amortization schedule.
(3)			Weighted average is based on the principal amounts outstanding and interest rates at March 31, 2023.
(4)			The $350 million unsecured senior notes were offered for sale at 99.601% of the principal amount. The resulting effective cost of the financing is approximately 3.45% before the consideration of transaction costs and proceeds from interest rate hedges. After the application of proceeds from interest rate hedges, the effective cost of the financing is approximately 3.43%.
(5)			The $400 million unsecured senior notes were offered for sale at 99.791% of the principal amount. The resulting effective cost of the financing is approximately 4.48% before the consideration of transaction costs and proceeds from interest rate hedges. After the application of proceeds from interest rate hedges, the effective cost of the financing is approximately 4.10%.
(6)			On January 31, 2023, Piedmont closed on a new $215 million unsecured term loan facility. The facility has an initial maturity of January 31, 2024. There is a one-year extension option available under the facility for a final maturity of January 31, 2025. The final extended maturity date is presented on this schedule.
(7)			The $215 million unsecured term loan has a variable interest rate. Piedmont may select from multiple interest rate options, including the prime rate and various term SOFR rates. The all-in interest rate associated with each SOFR interest period selection is comprised of the relevant adjusted SOFR rate (comprised of the relevant base SOFR interest rate plus a fixed adjustment of 0.10%) plus a credit spread (1.05% as of March 31, 2023) based on Piedmont's then current credit rating.
(8)			The $250 million unsecured term loan has a stated variable interest rate; however, Piedmont entered into various interest rate swap agreements in a total notional amount equal to the size of the facility which effectively fix the interest rate for the term loan (at 4.54% as of March 31, 2023; this rate can change only with a credit rating change for the Company) through the loan's maturity date of March 31, 2025.
(9)			The $200 million unsecured term loan has an initial maturity date of December 16, 2024. There is a six-month extension option available under the facility for a final maturity of June 18, 2025. The final extended maturity date is presented on this schedule.
(10)			The $200 million unsecured term loan has a variable interest rate. Piedmont may select from multiple interest rate options, including the prime rate and various term SOFR rates. The all-in interest rate associated with each SOFR interest period selection is comprised of the relevant adjusted SOFR rate (comprised of the relevant base SOFR interest rate plus a fixed adjustment of 0.10%) plus a credit spread (1.00% as of March 31, 2023) based on Piedmont's then current credit rating.
(11)			All of Piedmont’s outstanding debt as of March 31, 2023 was term debt with the exception of our unsecured revolving credit facility (which had no balance outstanding as of March 31, 2023). The $600 million unsecured revolving credit facility has an initial maturity date of June 30, 2026; however, there are two, six-month extension options available under the facility providing for a total extension of up to one year to June 30, 2027. The final extended maturity date is presented on this schedule.
(12)			There was no balance outstanding under the $600 million unsecured revolving credit facility as of the end of the first quarter of 2023; therefore, no interest rate is presented. Had any draws been made under the facility as of the end of the first quarter of 2023, the applicable interest rate would have been approximately 5.8%. Piedmont may select from multiple interest rate options with each draw under the facility, including the prime rate and various SOFR rates. The all-in interest rate associated with each SOFR interest period selection is comprised of the relevant adjusted SOFR rate (comprised of the relevant base SOFR interest rate plus a fixed adjustment of 0.10%) plus a credit spread (0.85% as of March 31, 2023) based on Piedmont's then current credit rating.
(13)			The $300 million unsecured senior notes were offered for sale at 99.236% of the principal amount. The resulting effective cost of the financing is approximately 3.24% before the consideration of transaction costs and the impact of interest rate hedges. After incorporating the results of the related interest rate hedging activity, the effective cost of the financing is approximately 3.90%.
(14)			The $300 million unsecured senior notes were offered for sale at 99.510% of the principal amount. The resulting effective cost of the financing is approximately 2.80% before the consideration of transaction costs and the impact of interest rate hedges. After incorporating the results of the related interest rate hedging activity, the effective cost of the financing is approximately 2.78%.
(15)			The GAAP accounting adjustments relate to original issue discounts, third-party fees, and lender fees resulting from the procurement processes for our various debt facilities. The original issue discounts and fees are amortized to interest expense over the contractual term of the related debt.

Piedmont Office Realty Trust, Inc.

Debt Covenant & Ratio Analysis (for Debt Holders)

As of March 31, 2023

Unaudited


		Three Months Ended
Bank Debt Covenant Compliance (1)	Required	3/31/2023	12/31/2022	9/30/2022	6/30/2022	3/31/2022

Maximum leverage ratio	0.60	0.38	0.39	0.40	0.35	0.34
Minimum fixed charge coverage ratio (2)	1.50	3.91	4.36	4.82	5.21	5.30
Maximum secured indebtedness ratio	0.40	0.04	0.04	0.04	—	—
Minimum unencumbered leverage ratio	1.60	2.64	2.56	2.46	2.87	2.84
Minimum unencumbered interest coverage ratio (3)	1.75	4.10	4.55	4.93	5.26	5.28


		Three Months Ended
Bond Covenant Compliance (4)	Required	3/31/2023	12/31/2022	9/30/2022	6/30/2022	3/31/2022

Total debt to total assets	60% or less	47.1%	44.0%	46.8%	40.9%	40.9%
Secured debt to total assets	40% or less	4.2%	4.3%	4.3%	—%	—%
Ratio of consolidated EBITDA to interest expense	1.50 or greater	4.44	4.95	5.49	5.92	6.04
Unencumbered assets to unsecured debt	150% or greater	211%	227%	212%	245%	244%

Three Months Ended

Twelve Months Ended

Other Debt Coverage Ratios for Debt Holders

March 31, 2023

December 31, 2022

Average net principal amount of debt to core EBITDA (5)

6.3 x

6.0 x

Fixed charge coverage ratio (6)

3.4 x

4.5 x

Interest coverage ratio (7)

3.4 x

4.5 x


(1)			Bank debt covenant compliance calculations relate to the most restrictive of the specific calculations detailed in the relevant credit agreements. Please refer to such agreements for relevant defined terms.
(2)			Defined as EBITDA for the trailing four quarters (including the Company's share of EBITDA from unconsolidated interests), excluding one-time or non-recurring gains or losses, less a $0.15 per square foot capital reserve, and excluding the impact of straight line rent leveling adjustments and amortization of intangibles divided by the Company's share of fixed charges, as more particularly described in the credit agreements. This definition of fixed charge coverage ratio as prescribed by our credit agreements is different from the fixed charge coverage ratio definition employed elsewhere within this report.
(3)			Defined as net operating income for the trailing four quarters for unencumbered assets (including the Company's share of net operating income from partially-owned entities and subsidiaries that are deemed to be unencumbered) less a $0.15 per square foot capital reserve divided by the Company's share of interest expense associated with unsecured financings only, as more particularly described in the credit agreements.
(4)			Bond covenant compliance calculations relate to specific calculations prescribed in the relevant debt agreements. Please refer to the Indenture dated May 9, 2013, the Indenture and the First Supplemental Indenture dated March 6, 2014, the Second Supplemental Indenture dated August 12, 2020, and the Third Supplemental Indenture dated September 20, 2021 for defined terms and detailed information about the calculations.
(5)			For the purposes of this calculation, we use the average daily principal balance of debt outstanding during the identified period, less the average of cash and cash equivalents and escrow deposits and restricted cash as of the end of each quarter in the relevant period.
(6)			Fixed charge coverage ratio is calculated as Core EBITDA divided by the sum of interest expense, principal amortization (none during periods presented), capitalized interest and preferred dividends (none during periods presented). The Company had capitalized interest of $1.2 million for the three months ended March 31, 2023 and $4.2 million for the twelve months ended December 31, 2022.
(7)			Interest coverage ratio is calculated as Core EBITDA divided by the sum of interest expense and capitalized interest. The Company had capitalized interest of $1.2 million for the three months ended March 31, 2023 and $4.2 million for the twelve months ended December 31, 2022.

Piedmont Office Realty Trust, Inc.

Tenant Diversification (1)

As of March 31, 2023

(in thousands except for number of properties)


Tenant	Credit Rating (2)	Number of Properties	Lease Term Remaining (3)	Annualized Lease Revenue	Percentage of Annualized Lease Revenue (%)		Leased Square Footage	Percentage of Leased Square Footage (%)
US Bancorp	A+ / A2	3	1.2		$28,129	5.0		787	5.5
State of New York	AA+ / Aa1	1	13.5		25,267	4.5		482	3.4
Amazon	AA / A1	4	1.7		16,351	2.9		337	2.3
City of New York	AA / Aa2	1	3.2		15,200	2.7		313	2.2
Microsoft	AAA / Aaa	2	8.2		13,375	2.4		355	2.5
King & Spalding	No Rating Available	1	7.9		12,628	2.2		272	1.9
Transocean	CCC / Caa1	1	13.1		11,392	2.0		301	2.1
Ryan	No Rating Available	1	2.8		9,323	1.6		178	1.2
VMware, Inc.	BBB- / Baa3	1	4.3		8,786	1.5		215	1.5
Schlumberger Technology	A / A2	1	5.8		8,106	1.4		254	1.8
Gartner	BB+ / Ba1	2	11.3		7,761	1.4		207	1.4
Fiserv	BBB / Baa2	1	4.3		7,373	1.3		195	1.4
Salesforce.com	A+ / A2	1	6.3		7,329	1.3		182	1.3
Epsilon Data Management / subsidiary of Publicis	BBB / Baa2	1	3.3		6,905	1.2		222	1.5
Applied Predictive Technologies / subsidiary of MasterCard	A+ / Aa3	1	5.2		6,625	1.2		133	0.9
Eversheds Sutherland	No Rating Available	1	3.1		6,413	1.1		180	1.2
International Food Policy Research Institute	No Rating Available	1	6.1		6,325	1.1		102	0.7
Cargill	A / A2	1	0.8		5,625	1.0		268	1.9





Other			Various		363,727	64.2		9,369	65.3
Total					$566,640	100.0		14,352	100.0


(1)			This schedule presents all tenants contributing 1.0% or more to Annualized Lease Revenue.
(2)			Credit rating may reflect the credit rating of the parent or a guarantor. When available, both the Standard & Poor's credit rating and the Moody's credit rating are provided. The absence of a credit rating for a tenant is not an indication of the creditworthiness of the tenant; in most cases, the lack of a credit rating reflects that the tenant has not sought such a rating.
(3)			The metrics presented are the weighted average lease terms remaining in years weighted by Annualized Lease Revenue.

Piedmont Office Realty Trust, Inc.

Tenant Credit Rating & Lease Distribution Information

As of March 31, 2023

Tenant Credit Rating (1)


Rating Level	Annualized Lease Revenue (in thousands)	Percentage of Annualized Lease Revenue (%)

AAA / Aaa	$22,199	3.9
AA / Aa	69,080	12.2
A / A	79,093	14.0
BBB / Baa	54,735	9.7
BB / Ba	19,532	3.4
B / B	8,360	1.5
Below	18,680	3.3
Not rated (2)	294,961	52.0
Total	$566,640	100.0

Lease Distribution


Lease Size	Number of Leases	Percentage of Leases (%)	Annualized Lease Revenue (in thousands)	Percentage of Annualized Lease Revenue (%)	Leased Square Footage (in thousands)	Percentage of Leased Square Footage (%)

2,500 or Less	366	37.2	$26,967	4.8	253	1.8
2,501 - 10,000	350	35.5	69,891	12.3	1,812	12.6
10,001 - 20,000	103	10.5	53,378	9.4	1,407	9.8
20,001 - 40,000	90	9.1	94,266	16.6	2,450	17.1
40,001 - 100,000	47	4.8	114,204	20.2	2,904	20.2
Greater than 100,000	29	2.9	207,934	36.7	5,526	38.5
Total	985	100.0	$566,640	100.0	14,352	100.0


(1)			Credit rating may reflect the credit rating of the parent or a guarantor. Where differences exist between the Standard & Poor's credit rating for a tenant and the Moody's credit rating for a tenant, the higher credit rating is selected for this analysis.
(2)			The classification of a tenant as "not rated" is not an indication of the creditworthiness of the tenant; in most cases, the lack of a credit rating reflects that the tenant has not sought such a rating. Included in this category are such tenants as Piper Sandler, Ernst & Young, KPMG, BDO, and RaceTrac Petroleum.

Piedmont Office Realty Trust, Inc.

Leased Percentage Information

(in thousands)


	Three Months Ended				Three Months Ended
	March 31, 2023				March 31, 2022
	Leased Square Footage	Rentable Square Footage	Percent Leased (1)		Leased Square Footage	Rentable Square Footage	Percent Leased (1)
As of December 31, 20xx	14,440	16,658	86.7	%	14,583	17,051	85.5	%


Leases signed during the period	544				552
Less:
Lease renewals signed during period	(274)				(309)
New leases signed during period for currently occupied space	(46)				(20)
Leases expired during period and other	(312)	16			(174)	—
Subtotal	14,352	16,674	86.1	%	14,632	17,051	85.8	%
Acquisitions and properties placed in service during period (2)	—	—			—	—
Dispositions and properties taken out of service during period (2)	—	—			(606)	(925)
As of March 31, 20xx	14,352	16,674	86.1	%	14,026	16,126	87.0	%


Same Store Analysis
Less acquisitions / dispositions after March 31, 2022 and developments / out-of-service redevelopments (2) (3)	(673)	(691)	97.4	%	(170)	(174)	97.7	%
Same Store Leased Percentage	13,679	15,983	85.6	%	13,856	15,952	86.9	%


(1)			Calculated as square footage associated with commenced leases as of period end with the addition of square footage associated with uncommenced leases for spaces vacant as of period end at our in-service properties, divided by total rentable in-service square footage as of period end, expressed as a percentage.
(2)			For additional information on acquisitions and dispositions completed during the last year and current developments and out-of-service redevelopments, please refer to pages 31 and 32, respectively.
(3)			Dispositions completed during the previous twelve months are deducted from the previous period data and acquisitions completed during the previous twelve months are deducted from the current period data. Redevelopments that commenced during the previous twelve months that were taken out of service are deducted from the previous period data and developments and previously out of service redevelopments that were placed in service during the previous twelve months are deducted from the current period data.

Piedmont Office Realty Trust, Inc.

Rental Rate Roll Up / Roll Down Analysis (1)

(in thousands)


	Three Months Ended
	March 31, 2023
	Square Feet	% of Total Signed During Period	% of Rentable Square Footage	% Change Cash Rents (2)	% Change Accrual Rents (3)

Leases executed for spaces vacant one year or less	283	52.0%	1.7%	5.7%	9.9%
Leases executed for spaces excluded from analysis (4)	261	48.0%


(1)			The populations analyzed for this analysis consist of consolidated leases executed during the relevant period with lease terms of greater than one year. Leases associated with storage spaces, retail spaces, management offices, and newly acquired assets for which there is less than one year of operating history, along with percentage rent leases, are excluded from this analysis.
(2)			For the purposes of this analysis, the last twelve months of cash paying rents of the previous leases are compared to the first twelve months of cash paying rents of the new leases in order to calculate the percentage change.
(3)			For the purposes of this analysis, the accrual basis rents of the previous leases are compared to the accrual basis rents of the new leases in order to calculate the percentage change. For newly signed leases which have variations in accrual basis rents, whether because of known future expansions, contractions, lease expense recovery structure changes, or other similar reasons, the weighted average of such varying accrual basis rents is used for the purposes of this analysis.
(4)			Represents leases signed at our consolidated office assets that do not qualify for inclusion in the analysis, primarily because the spaces for which the new leases were signed had been vacant for more than one year.

Piedmont Office Realty Trust, Inc.

Lease Expiration Schedule

As of March 31, 2023

(in thousands)



Expiration Year	Annualized Lease Revenue (1)	Percentage of Annualized Lease Revenue (%)	Rentable Square Footage	Percentage of Rentable Square Footage (%)
Vacant	$—	—	2,322	13.9






2023 (2)	25,924	4.6	800	4.8
2024 (3)	67,641	11.9	1,930	11.6
2025	70,029	12.4	1,749	10.5
2026	61,991	10.9	1,599	9.6
2027	53,908	9.5	1,419	8.5
2028	68,553	12.1	1,801	10.8
2029	44,224	7.8	1,070	6.4
2030	24,598	4.3	674	4.0
2031	24,214	4.3	615	3.7
2032	22,616	4.0	567	3.4
2033	9,967	1.8	223	1.3
2034	18,905	3.3	483	2.9
2035	15,959	2.8	408	2.5
Thereafter	58,111	10.3	1,014	6.1
Total	$566,640	100.0	16,674	100.0


Average Lease Term Remaining
3/31/2023			5.7 years
12/31/2022			5.6 years

https://cdn.kscope.io/ccbc4317f7b5d7f758bbfdbbc5ed3e1a-chart-a4a01159caaa4ecc964.jpg


(1)			Annualized rental income associated with each newly executed lease for currently occupied space is incorporated herein only at the expiration date for the current lease. Annualized rental income associated with each such new lease is removed from the expiry year of the current lease and added to the expiry year of the new lease. These adjustments effectively incorporate known roll ups and roll downs into the expiration schedule.
(2)			Includes leases with an expiration date of March 31, 2023, comprised of approximately 66,000 square feet and Annualized Lease Revenue of $2.7 million.
(3)			Leases and other revenue-producing agreements on a month-to-month basis, comprised of approximately 10,000 square feet and Annualized Lease Revenue of $0.1 million, are assigned a lease expiration date of a year and a day beyond the period end date.

Piedmont Office Realty Trust, Inc.

Lease Expirations by Quarter

As of March 31, 2023

(in thousands)


	Q2 2023 (1)		Q3 2023		Q4 2023		Q1 2024
Location	Expiring Square Footage	Expiring Lease Revenue (2)	Expiring Square Footage	Expiring Lease Revenue (2)	Expiring Square Footage	Expiring Lease Revenue (2)	Expiring Square Footage	Expiring Lease Revenue (2)

Atlanta	34	$1,361	37	$1,305	39	$1,418	22	$848
Boston	9	446	6	145	—	—	7	306
Dallas	112	4,230	22	795	88	3,568	18	698
Minneapolis	22	905	8	364	290	6,508	17	587
New York	2	96	34	1,875	—	—	—	—
Orlando	3	105	3	85	71	1,938	265	4,733
Washington, D.C.	12	755	1	53	3	173	83	4,390
Other	—	—	—	—	4	69	—	—
Total (3)	194	$7,898	111	$4,622	495	$13,674	412	$11,562


(1)			Includes leases with an expiration date of March 31, 2023, comprised of approximately 66,000 square feet and expiring lease revenue of $2.5 million. No such adjustments are made to other periods presented.
(2)			Expiring Lease Revenue is calculated as expiring square footage multiplied by the gross rent per square foot of the tenant currently leasing the space.
(3)			Total expiring lease revenue in any given year will not tie to the expiring Annualized Lease Revenue presented on the Lease Expiration Schedule on the previous page as the Lease Expiration Schedule accounts for the revenue effects of newly signed leases. Reflected herein are expiring revenues based on in-place rental rates.

Piedmont Office Realty Trust, Inc.

Lease Expirations by Year

As of March 31, 2023

(in thousands)


	12/31/2023 (1)		12/31/2024		12/31/2025		12/31/2026		12/31/2027
Location	Expiring Square Footage	Expiring Lease Revenue (2)	Expiring Square Footage	Expiring Lease Revenue (2)	Expiring Square Footage	Expiring Lease Revenue (2)	Expiring Square Footage	Expiring Lease Revenue (2)	Expiring Square Footage	Expiring Lease Revenue (2)
Atlanta	109	$4,084	293	$10,787	434	$14,638	478	$17,600	606	$23,074
Boston	15	592	13	541	178	6,959	16	534	27	788
Dallas	222	8,593	184	7,026	630	28,895	375	12,520	212	7,288
Minneapolis	321	7,777	908	32,524	254	10,001	28	1,039	218	7,485
New York	36	1,971	2	159	10	504	313	15,212	15	724
Orlando	76	2,127	348	7,917	211	7,017	286	9,738	212	7,625
Washington, D.C.	16	981	182	9,202	32	2,396	103	5,328	129	6,926
Other	5	69	—	5	—	—	—	—	—	5
Total (3)	800	$26,194	1,930	$68,161	1,749	$70,410	1,599	$61,971	1,419	$53,915


(1)			Includes leases with an expiration date of March 31, 2023, comprised of approximately 66,000 square feet and expiring lease revenue of $2.5 million. No such adjustments are made to other periods presented.
(2)			Expiring Lease Revenue is calculated as expiring square footage multiplied by the gross rent per square foot of the tenant currently leasing the space.
(3)			Total expiring lease revenue in any given year will not tie to the expiring Annualized Lease Revenue presented on the Lease Expiration Schedule on page 24 as the Lease Expiration Schedule accounts for the revenue effects of newly signed leases. Reflected herein are expiring revenues based on in-place rental rates.

Piedmont Office Realty Trust, Inc.

Contractual Tenant Improvements and Leasing Commissions



		Three Months Ended March 31, 2023			For the Year Ended				2019 to 2023 (Weighted Average Total)
			2022	2021	2020	2019










Total Leasing Transactions
	Square feet	543,560			2,142,852	2,247,366	1,103,248	2,730,332		8,767,358
	Tenant improvements per square foot per year of lease term (1)	$3.98			$3.22	$2.78	$4.30	$4.21		$3.64
	Leasing commissions per square foot per year of lease term	$2.35			$2.22	$1.67	$1.89	$1.70		$1.86
	Total per square foot per year of lease term	$6.33			$5.44	$4.45	$6.19	$5.91		$5.50
Less Adjustment for Commitment Expirations (2)
	Expired tenant improvements (not paid out) per square foot per year of lease term	-$0.15			-$0.10	-$0.20	-$0.40	-$0.05		-$0.14

	Adjusted total per square foot per year of lease term	$6.18			$5.34	$4.25	$5.79	$5.86		$5.36


NOTE:			This information is presented for our consolidated office assets only and excludes activity associated with storage and license spaces.
(1)			For leases under which a tenant may use, at its discretion, a portion of its tenant improvement allowance for expenses other than those related to improvements to its space, an assumption is made that the tenant elects to use any such portion of its tenant improvement allowance for improvements to its space prior to the commencement of its lease, unless the Company is notified otherwise by the tenant. This assumption is made based upon historical usage patterns of tenant improvement allowances by the Company's tenants.
(2)			The Company has historically reported the maximum amount of capital to which it committed in leasing transactions as of the signing of the leases with no subsequent updates for variations and/or changes in tenants' uses of tenant improvement allowances. Many times, tenants do not fully use the allowances provided in their leases or let portions of their tenant improvement allowances expire. In an effort to provide additional clarity on the actual costs of completed leasing transactions, tenant improvement allowances that expired or became no longer available to tenants are disclosed in this section and are deducted from the capital commitments per square foot of leased space in the periods in which they expired in an effort to provide a better estimation of leasing transaction costs over time.

Piedmont Office Realty Trust, Inc.

Geographic Diversification

As of March 31, 2023

($ and square footage in thousands)


Location	Number of Properties	Annualized Lease Revenue	Percentage of Annualized Lease Revenue (%)	Rentable Square Footage	Percentage of Rentable Square Footage (%)	Leased Square Footage	Percent Leased (%)
Atlanta	11	$153,384	27.1	4,717	28.3	4,042	85.7
Dallas	13	115,258	20.3	3,540	21.2	2,954	83.4
Minneapolis	6	66,758	11.8	2,104	12.6	1,918	91.2
Washington, D.C.	6	65,650	11.6	1,620	9.7	1,241	76.6
Orlando	6	60,084	10.6	1,764	10.6	1,657	93.9
New York	1	47,174	8.3	1,045	6.3	903	86.4
Boston	6	38,753	6.8	1,270	7.6	1,077	84.8
Other	2	19,579	3.5	614	3.7	560	91.2
Total / Weighted Average	51	$566,640	100.0	16,674	100.0	14,352	86.1

https://cdn.kscope.io/ccbc4317f7b5d7f758bbfdbbc5ed3e1a-chart-70edca3e113a4cbb8cc.jpg

Piedmont Office Realty Trust, Inc.

Geographic Diversification by Location Type

As of March 31, 2023

(square footage in thousands)


		CBD				URBAN INFILL / SUBURBAN				TOTAL
Location	State	Number of Properties	Percentage of Annualized Lease Revenue (%)	Rentable Square Footage	Percentage of Rentable Square Footage (%)	Number of Properties	Percentage of Annualized Lease Revenue (%)	Rentable Square Footage	Percentage of Rentable Square Footage (%)	Number of Properties	Percentage of Annualized Lease Revenue (%)	Rentable Square Footage	Percentage of Rentable Square Footage (%)
Atlanta	GA	2	9.6	1,314	7.9	9	17.5	3,403	20.4	11	27.1	4,717	28.3
Dallas	TX	—	—	—	—	13	20.3	3,540	21.2	13	20.3	3,540	21.2
Minneapolis	MN	1	6.0	937	5.6	5	5.8	1,167	7.0	6	11.8	2,104	12.6
Washington, D.C.	DC, VA	3	5.1	722	4.3	3	6.5	898	5.4	6	11.6	1,620	9.7
Orlando	FL	4	8.8	1,455	8.7	2	1.8	309	1.9	6	10.6	1,764	10.6
New York	NY	1	8.3	1,045	6.3	—	—	—	—	1	8.3	1,045	6.3
Boston	MA	—	—	—	—	6	6.8	1,270	7.6	6	6.8	1,270	7.6
Other		—	—	—	—	2	3.5	614	3.7	2	3.5	614	3.7

Total		11	37.8	5,473	32.8	40	62.2	11,201	67.2	51	100.0	16,674	100.0

Piedmont Office Realty Trust, Inc.

Industry Diversification

As of March 31, 2023

($ and square footage in thousands)


				Percentage of
	Number of	Percentage of Total	Annualized Lease	Annualized Lease	Leased Square	Percentage of Leased
Industry	Tenants	Tenants (%)	Revenue	Revenue (%)	Footage	Square Footage (%)
Business Services	85	11.7	$87,445	15.4	2,265	15.8
Engineering, Accounting, Research, Management & Related Services	101	13.9	79,499	14.0	1,922	13.4
Legal Services	80	11.0	56,000	9.9	1,391	9.7
Governmental Entity	5	0.7	47,501	8.4	938	6.5
Depository Institutions	20	2.7	38,524	6.8	1,037	7.2
Real Estate	49	6.7	27,588	4.9	810	5.6
Oil and Gas Extraction	5	0.7	22,193	3.9	631	4.4
Holding and Other Investment Offices	36	4.9	20,767	3.7	511	3.6
Miscellaneous Retail	9	1.2	20,762	3.7	467	3.3
Security & Commodity Brokers, Dealers, Exchanges & Services	49	6.7	18,214	3.2	470	3.3
Automotive Repair, Services & Parking	7	1.0	15,009	2.6	4	—
Health Services	30	4.1	14,341	2.5	370	2.6
Insurance Agents, Brokers & Services	20	2.7	12,242	2.2	357	2.5
Membership Organizations	16	2.2	10,124	1.8	197	1.4
Eating & Drinking Places	32	4.4	8,594	1.5	225	1.6
Other	184	25.4	87,837	15.5	2,757	19.1
Total	728	100.0	$566,640	100.0	14,352	100.0

Piedmont Office Realty Trust, Inc.

Property Investment Activity

As of March 31, 2023

($ and square footage in thousands)

Acquisitions Completed During Prior Year and Current Year

Property

Market / Submarket

Acquisition Period

Percent
Ownership (%)

Year Built

Purchase Price

Rentable Square
Footage

Percent Leased at
Acquisition (%)

1180 Peachtree Street

Atlanta / Midtown

Q3 2022

100

2005

$465,665

691

Dispositions Completed During Prior Year and Current Year


Property	Market / Submarket	Disposition Period	Percent Ownership (%)	Year Built	Sale Price	Rentable Square Footage	Percent Leased at Disposition (%)
Two Pierce Place	Chicago / Northwest	Q1 2022	100	1991	$24,000	485	34
225 and 235 Presidential Way	Boston / Route 128	Q1 2022	100	2001 and 2000	129,000	440	100
Cambridge Portfolio	Boston / Cambridge	Q4 2022	100	Various	160,225	175	94
Total / Weighted Average					$313,225	1,100	70

Piedmont Office Realty Trust, Inc.

Other Investments

As of March 31, 2023

($ and square footage in thousands)

Developable Land Parcels

Property

Market / Submarket

Adjacent Piedmont Project

Acres

Real Estate Book Value

Gavitello

Atlanta / Buckhead

The Medici

2.0

$2,601

Glenridge Highlands Three

Atlanta / Central Perimeter

Glenridge Highlands

3.0

2,015

Galleria Atlanta

Atlanta / Northwest

Galleria

16.3

24,235

State Highway 161

Dallas / Las Colinas

Las Colinas Corporate Center

4.5

3,320

Royal Lane

Dallas / Las Colinas

6011, 6021 & 6031 Connection Drive

10.6

2,837

John Carpenter Freeway

Dallas / Las Colinas

750 West John Carpenter Freeway

3.5

1,000

Galleria Dallas

Dallas / Lower North Tollway

Galleria Office Towers

1.9

5,876

TownPark

Orlando / Lake Mary

400 & 500 TownPark Commons

18.9

9,116

Total

60.7

$51,000

Out-of-Service Redevelopment

Property

Market / Submarket

Adjacent Piedmont Property

Construction Type

Percent Leased (%)

Square Feet

Current Asset Basis (Accrual)

222 South Orange Avenue (1)

Orlando / CBD

200 South Orange Avenue

Redevelopment

14.6

127

$25.3 million


(1)			The property was acquired on October 29, 2020 and was vacant at the time of acquisition. It shares a common lobby and atrium with the Company's 200 South Orange Avenue property. The redevelopment includes an enhanced window line and balconies, allowing more light and air into tenant spaces, along with renovations to the lobby, common areas and restrooms.

Piedmont Office Realty Trust, Inc.

Supplemental Definitions


Included below are definitions of various terms used throughout this supplemental report, including definitions of certain non-GAAP financial measures and the reasons why the Company’s management believes these measures provide useful information to investors about the Company’s financial condition and results of operations. Reconciliations of any non-GAAP financial measures defined below are included beginning on page 35.
Adjusted Funds From Operations ("AFFO"): The Company calculates AFFO by starting with Core FFO and adjusting for non-incremental capital expenditures and then adding back non-cash items including: non-real estate depreciation, straight-lined rents and fair value lease adjustments, non-cash components of interest expense and compensation expense, and by making similar adjustments for joint ventures, if any. AFFO is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of the Company’s operating performance. The Company believes that AFFO is helpful to investors as a meaningful supplemental comparative performance measure of our ability to make incremental capital investments. Other REITs may not define AFFO in the same manner as the Company; therefore, the Company’s computation of AFFO may not be comparable to that of other REITs.
Annualized Lease Revenue ("ALR"): ALR is calculated by multiplying (i) rental payments (defined as base rent plus operating expense reimbursements, if payable by the tenant on a monthly basis under the terms of a lease that has been executed, but excluding a) rental abatements and b) rental payments related to executed but not commenced leases for space that was covered by an existing lease), by (ii) 12. In instances in which contractual rents or operating expense reimbursements are collected on an annual, semi-annual, or quarterly basis, such amounts are multiplied by a factor of 1, 2, or 4, respectively, to calculate the annualized figure. For leases that have been executed but not commenced relating to un-leased space, ALR is calculated by multiplying (i) the monthly base rental payment (excluding abatements) plus any operating expense reimbursements for the initial month of the lease term, by (ii) 12. Unless stated otherwise, this measure excludes revenues associated with development properties and properties taken out of service for redevelopment, if any.
Core EBITDA: The Company calculates Core EBITDA as net income/(loss) (computed in accordance with GAAP) before interest, taxes, depreciation and amortization and removing any impairment losses, gains or losses from sales of property and other significant infrequent items that create volatility within our earnings and make it difficult to determine the earnings generated by our core ongoing business. Core EBITDA is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of the Company’s operating performance. The Company believes that Core EBITDA is helpful to investors as a supplemental performance measure because it provides a metric for understanding the performance of the Company’s results from ongoing operations without taking into account the effects of non-cash expenses (such as depreciation and amortization), as well as items that are not part of normal day-to-day operations of the Company’s business. Other REITs may not define Core EBITDA in the same manner as the Company; therefore, the Company’s computation of Core EBITDA may not be comparable to that of other REITs.
Core Funds From Operations ("Core FFO"): The Company calculates Core FFO by starting with FFO, as defined by NAREIT, and adjusting for gains or losses on the extinguishment of swaps and/or debt and any significant non-recurring items. Core FFO is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of the Company’s operating performance. The Company believes that Core FFO is helpful to investors as a supplemental performance measure because it excludes the effects of certain infrequent or non-recurring items which can create significant earnings volatility, but which do not directly relate to the Company’s core business operations. As a result, the Company believes that Core FFO can help facilitate comparisons of operating performance between periods and provides a more meaningful predictor of future earnings potential. Other REITs may not define Core FFO in the same manner as the Company; therefore, the Company’s computation of Core FFO may not be comparable to that of other REITs.
EBITDA: EBITDA is defined as net income/(loss) before interest, taxes, depreciation and amortization.
EBITDAre: The Company calculates EBITDAre in accordance with the current National Association of Real Estate Investment Trusts (“NAREIT”) definition. NAREIT currently defines EBITDAre as net income/(loss) (computed in accordance with GAAP) adjusted for gains or losses from sales of property, impairment losses, depreciation on real estate assets, amortization on real estate assets, interest expense and taxes, along with the same adjustments for joint ventures. Some of the adjustments mentioned can vary among owners of identical assets in similar conditions based on historical cost accounting and useful-life estimates. EBITDAre is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of the Company’s operating performance. The Company believes that EBITDAre is helpful to investors as a supplemental performance measure because it provides a metric for understanding the Company’s results from ongoing operations without taking into account the effects of non-cash expenses (such as depreciation and amortization) and capitalization and capital structure expenses (such as interest expense and taxes). The Company also believes that EBITDAre can help facilitate comparisons of operating performance between periods and with other REITs. However, other REITs may not define EBITDAre in accordance with the NAREIT definition, or may interpret the current NAREIT definition differently than the Company; therefore, the Company’s computation of EBITDAre may not be comparable to that of such other REITs.
Funds From Operations ("FFO"): The Company calculates FFO in accordance with the current National Association of Real Estate Investment Trusts (“NAREIT”) definition. NAREIT currently defines FFO as net income/(loss) (calculated in accordance with GAAP), excluding depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, gains and losses from change in control, and impairment write-downs of certain real estate assets and investment in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity, along with appropriate adjustments to those reconciling items for joint ventures, if any. These adjustments can vary among owners of identical assets in similar conditions based on historical cost accounting and useful-life estimates. FFO is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of the Company’s operating performance. The Company believes that FFO is helpful to investors as a supplemental performance measure because it excludes the effects of depreciation, amortization and gains or losses from sales of real estate, all of which are based on historical costs, which implicitly assumes that the value of real estate diminishes predictably over time. The Company also believes that FFO can help facilitate comparisons of operating performance between periods and with other REITs. However, other REITs may not define FFO in accordance with the NAREIT definition, or may interpret the current NAREIT definition differently than the Company; therefore, the Company’s computation of FFO may not be comparable to that of such other REITs.
Incremental Capital Expenditures: Incremental Capital Expenditures are defined as capital expenditures of a non-recurring nature that incrementally enhance the underlying assets' income generating capacity. Tenant improvements, leasing commissions, building capital and deferred lease incentives ("Leasing Costs") incurred to lease space that was vacant at acquisition, Leasing Costs for spaces vacant for greater than one year, Leasing Costs for spaces at newly acquired properties for which in-place leases expire shortly after acquisition, improvements associated with the expansion of a building, renovations that change the underlying classification of a building, and deferred building maintenance capital identified at and completed shortly after acquisition are included in this measure.
Non-Incremental Capital Expenditures: Non-Incremental Capital Expenditures are defined as capital expenditures of a recurring nature related to tenant improvements and leasing commissions that do not incrementally enhance the underlying assets' income generating capacity. We exclude first generation tenant improvements and leasing commissions from this measure, in addition to other capital expenditures that qualify as Incremental Capital Expenditures, as defined above.
Property Net Operating Income ("Property NOI"): The Company calculates Property NOI by starting with Core EBITDA and adjusting for general and administrative expense, income associated with property management performed by Piedmont for other organizations and other income or expense items for the Company, such as interest income from loan investments or costs from the pursuit of non-consummated transactions. The Company may present this measure on an accrual basis or a cash basis. When presented on a cash basis, the effects of non-cash general reserve for uncollectible accounts, straight lined rents and fair value lease revenue are also eliminated. Property NOI is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of the Company’s operating performance. The Company believes that Property NOI is helpful to investors as a supplemental comparative performance measure of income generated by its properties alone without the administrative overhead of the Company. Other REITs may not define Property NOI in the same manner as the Company; therefore, the Company’s computation of Property NOI may not be comparable to that of other REITs.
Same Store Net Operating Income ("Same Store NOI"): The Company calculates Same Store NOI as Property NOI attributable to the properties for which the following criteria were met during the entire span of the current and prior year reporting periods: (i) they were owned, (ii) they were not under development / redevelopment, and (iii) none of the operating expenses for which were capitalized. Same Store NOI also excludes amounts attributable to land assets. The Company may present this measure on an accrual basis or a cash basis. Same Store NOI is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of the Company’s operating performance. The Company believes that Same Store NOI is helpful to investors as a supplemental comparative performance measure of the income generated from the same group of properties from one period to the next. Other REITs may not define Same Store NOI in the same manner as the Company; therefore, the Company’s computation of Same Store NOI may not be comparable to that of other REITs.
Same Store Properties: Same Store Properties is defined as those properties for which the following criteria were met during the entire span of the current and prior year reporting periods: (i) they were owned, (ii) they were not under development / redevelopment, and (iii) none of the operating expenses for which were capitalized. Same Store Properties excludes land assets.
Total Gross Assets: Total Gross Assets is defined as total assets with the add-back of accumulated depreciation and accumulated amortization related to real estate assets and accumulated amortization related to deferred lease costs.
Total Gross Real Estate Assets: Total Gross Real Estate Assets is defined as total real estate assets with the add-back of accumulated depreciation and accumulated amortization related to real estate assets.

Piedmont Office Realty Trust, Inc.

Research Coverage

Equity Research Coverage


Dylan Burzinski	Anthony Paolone, CFA	Nicholas Thillman	Michael Lewis, CFA
Green Street Advisors	JP Morgan	Robert W. Baird & Co.	Truist Securities
100 Bayview Circle, Suite 400	383 Madison Avenue	777 East Wisconsin Avenue	711 Fifth Avenue, 4th Floor
Newport Beach, CA 92660	32nd Floor	Milwaukee, WI 53202	New York, NY 10022
Phone: (949) 640-8780	New York, NY 10179	Phone: (414) 298-5053	Phone: (212) 319-5659
	Phone: (212) 622-6682

Fixed Income Research Coverage


Mark S. Streeter, CFA
JP Morgan
383 Madison Avenue
3rd Floor
New York, NY 10179
Phone: (212) 834-5086

Piedmont Office Realty Trust, Inc.

Funds From Operations, Core Funds From Operations, and Adjusted Funds From Operations Reconciliations

Unaudited (in thousands)


	Three Months Ended
	3/31/2023		12/31/2022		9/30/2022		6/30/2022		3/31/2022

GAAP net income / (loss) applicable to common stock	$	(1,367)	$	75,569	$	3,331	$	7,966	$	59,964
Depreciation	35,690		34,587		34,743		32,187		31,332
Amortization	22,021		23,905		23,278		21,468		22,240
Impairment loss	—		25,981		—		—		—
Loss / (gain) on sale of properties	—		(101,055)		—		(1)		(50,673)

NAREIT funds from operations applicable to common stock	56,344		58,987		61,352		61,620		62,863
Adjustments:
Severance costs associated with fourth quarter 2022 management reorganization	—		2,248		—		—		—



Core funds from operations applicable to common stock	56,344		61,235		61,352		61,620		62,863
Adjustments:
Amortization of debt issuance costs and discounts on debt	1,239		926		922		763		778
Depreciation of non real estate assets	97		191		189		175		173
Straight-line effects of lease revenue	(3,187)		(2,356)		(3,268)		(3,029)		(2,577)
Stock-based compensation adjustments	183		1,717		1,950		1,718		(552)
Amortization of lease-related intangibles	(3,412)		(3,713)		(3,542)		(3,009)		(3,162)

Non-incremental capital expenditures
Building/Construction/Development	(4,752)		(3,967)		(6,897)		(4,748)		(3,506)
Tenant Improvements	(5,699)		(2,934)		(3,146)		(3,402)		(11,506)
Leasing Costs	(4,021)		(4,017)		(4,078)		(1,188)		(3,935)

Adjusted funds from operations applicable to common stock	$	36,792	$	47,082	$	43,482	$	48,900	$	38,576

Piedmont Office Realty Trust, Inc.

Same Store Net Operating Income (Cash Basis)

Unaudited (in thousands)


	Three Months Ended
	3/31/2023		12/31/2022		9/30/2022		6/30/2022		3/31/2022

Net income / (loss) applicable to Piedmont	$	(1,367)	$	75,569	$	3,331	$	7,966	$	59,964
Net income / (loss) applicable to noncontrolling interest	3		1		—		(1)		—
Interest expense	22,077		20,739		17,244		13,775		13,898
Depreciation	35,787		34,778		34,931		32,362		31,505
Amortization	22,021		23,905		23,278		21,468		22,240
Depreciation and amortization attributable to noncontrolling interests	20		20		21		22		22
Impairment loss	—		25,981		—		—		—
(Gain) / loss on sale of properties	—		(101,055)		—		(1)		(50,673)

EBITDAre	78,541		79,938		78,805		75,591		76,956
Severance costs associated with fourth quarter 2022 management reorganization	—		2,248		—		—		—



Core EBITDA	78,541		82,186		78,805		75,591		76,956
General & administrative expenses	7,691		5,668		6,590		7,027		7,595
Non-cash general reserve for uncollectible accounts	(400)		(1,000)		(1,000)		(1,000)		—
Management fee revenue	(293)		(261)		(177)		(203)		(362)
Other (income) / expense	(1,440)		(193)		(119)		273		(1,808)
Straight-line effects of lease revenue	(3,187)		(2,356)		(3,268)		(3,029)		(2,577)
Straight-line effects of lease revenue attributable to noncontrolling interests	(4)		(4)		(4)		(1)		(1)
Amortization of lease-related intangibles	(3,412)		(3,713)		(3,542)		(3,009)		(3,162)
Property net operating income (cash basis)	77,496		80,327		77,285		75,649		76,641
Deduct net operating (income) / loss from:
Acquisitions	(5,073)		(5,313)		(2,867)		—		—
Dispositions	25		(2,343)		(2,587)		(2,704)		(3,080)
Other investments	164		224		211		138		189
Same store net operating income (cash basis)	$	72,612	$	72,895	$	72,042	$	73,083	$	73,750

Piedmont Office Realty Trust, Inc.

In-Service Portfolio Detail (1)

As of March 31, 2023

(in thousands)



Project Name	Energy Star Certification	LEED Certification	BOMA 360 Certification	Percent Ownership	Number of Buildings	Rentable Square Footage Owned	Percent Leased		Commenced Leased Percentage		Economic Leased Percentage (2)		Annualized Lease Revenues

Atlanta
999 Peachtree Street	P	P	P	100.0%	1	623	85.2	%	80.7	%	79.9	%	20,650
1180 Peachtree Street	P	P	P	100.0%	1	691	97.4	%	96.7	%	88.3	%	33,689
Galleria	P		P	100.0%	5	2,156	80.0	%	77.2	%	69.5	%	56,746
Glenridge Highlands	P	P	P	100.0%	2	714	89.8	%	89.8	%	87.0	%	23,460
1155 Perimeter Center West	P	P	P	100.0%	1	377	87.3	%	83.0	%	80.6	%	13,203
The Medici	P		P	100.0%	1	156	92.3	%	92.3	%	84.6	%	5,636
Metropolitan Area Subtotal / Weighted Average					11	4,717	85.7	%	83.4	%	77.7	%	153,384
Boston
5 Wall Street	P	P	P	100.0%	1	182	100.0	%	100.0	%	100.0	%	7,332
Wayside Office Park	P		P	100.0%	2	473	96.8	%	89.9	%	89.9	%	17,929
25 Burlington Mall Road	P		P	100.0%	1	291	54.6	%	53.6	%	50.5	%	6,775
80 & 90 Central Street	P		P	100.0%	2	324	85.8	%	71.3	%	66.7	%	6,717
Metropolitan Area Subtotal / Weighted Average					6	1,270	84.8	%	78.3	%	76.4	%	38,753
Dallas
Galleria Office Towers	P	P	P	100.0%	3	1,439	92.1	%	87.8	%	87.2	%	57,404
One Lincoln Park	P	P	P	100.0%	1	257	75.9	%	75.9	%	56.4	%	7,947
Park Place on Turtle Creek	P		P	100.0%	1	177	79.7	%	78.0	%	78.0	%	7,001
6565 North MacArthur Boulevard	P	P	P	100.0%	1	255	80.4	%	80.4	%	78.0	%	6,481
750 West John Carpenter Freeway	P	P	P	100.0%	1	315	46.3	%	46.3	%	28.6	%	4,694
6011, 6021 & 6031 Connection Drive	P		P	100.0%	3	606	91.9	%	91.9	%	83.2	%	19,134
Las Colinas Corporate Center	P		P	100.0%	3	491	78.4	%	62.3	%	56.4	%	12,597
Metropolitan Area Subtotal / Weighted Average					13	3,540	83.4	%	79.4	%	73.7	%	115,258
Minneapolis
US Bancorp Center	P	P	P	100.0%	1	937	92.0	%	90.9	%	89.3	%	34,085
One & Two Meridian Crossings	P		P	100.0%	2	384	93.2	%	93.2	%	93.2	%	12,128
Crescent Ridge II	P	P	P	100.0%	1	301	82.4	%	79.1	%	74.8	%	8,810
Norman Pointe I	P		P	100.0%	1	214	85.0	%	85.0	%	84.1	%	6,110
9320 Excelsior Boulevard				100.0%	1	268	100.0	%	100.0	%	100.0	%	5,625
Metropolitan Area Subtotal / Weighted Average					6	2,104	91.2	%	90.2	%	88.8	%	66,758
New York
60 Broad Street			P	100.0%	1	1,045	86.4	%	86.4	%	86.3	%	47,174
Metropolitan Area Subtotal / Weighted Average					1	1,045	86.4	%	86.4	%	86.3	%	47,174



Project Name	Energy Star Certification	LEED Certification	BOMA 360 Certification	Percent Ownership	Number of Buildings	Rentable Square Footage Owned	Percent Leased		Commenced Leased Percentage		Economic Leased Percentage (2)		Annualized Lease Revenues

Orlando
200 South Orange Avenue	P	P	P	100.0%	1	653	90.0	%	82.7	%	70.9	%	23,625
CNL Center I & II	P		P	99.0%	2	620	93.2	%	93.2	%	85.0	%	24,371
501 West Church Street				100.0%	1	182	100.0	%	100.0	%	100.0	%	1,741
400 & 500 TownPark Commons	P	P	P	100.0%	2	309	100.0	%	100.0	%	99.4	%	10,347
Metropolitan Area Subtotal / Weighted Average					6	1,764	93.9	%	91.2	%	83.8	%	60,084
Washington, D.C.
4250 North Fairfax Drive	P	P	P	100.0%	1	308	86.0	%	86.0	%	86.0	%	13,631
Arlington Gateway	P	P	P	100.0%	1	329	79.3	%	77.8	%	77.8	%	13,417
3100 Clarendon Boulevard	P	P	P	100.0%	1	261	82.4	%	82.4	%	78.5	%	9,529
1201 & 1225 Eye Street	P	P	P	(3)	2	496	69.2	%	69.2	%	67.7	%	21,011
400 Virginia Avenue	P	P	P	100.0%	1	226	69.5	%	69.5	%	69.5	%	8,062
Metropolitan Area Subtotal / Weighted Average					6	1,620	76.6	%	76.3	%	75.2	%	65,650
Other
Enclave Place	P	P	P	100.0%	1	301	100.0	%	100.0	%	100.0	%	11,397
1430 Enclave Parkway	P	P	P	100.0%	1	313	82.7	%	82.7	%	81.8	%	8,182
Metropolitan Area Subtotal / Weighted Average					2	614	91.2	%	91.2	%	90.7	%	19,579

Grand Total					51	16,674	86.1	%	83.6	%	79.6	%	566,640


(1)			This schedule includes information for Piedmont's in-service portfolio of properties only. Information on investments excluded from this schedule can be found on page 32.
(2)			Economic leased percentage excludes the square footage associated with executed but not commenced leases for currently vacant spaces and the square footage associated with tenants receiving rental abatements (after proportional adjustments for tenants receiving only partial rental abatements).
(3)			Piedmont owns 98.6% of 1201 Eye Street and 98.1% of 1225 Eye Street; however, it is entitled to 100% of the cash flows for each asset pursuant to the terms of each property ownership entity's joint venture agreement.

Piedmont Office Realty Trust, Inc.

Major Leases Not Yet Commenced and Major Abatements

As of March 31, 2023, the Company had approximately 1,330,000 square feet of executed leases for vacant space yet to commence (approximately 410,000 square feet) or under rental abatement (approximately 920,000 square feet).

Presented below is a schedule of uncommenced new leases greater than 50,000 square feet and their anticipated commencement dates. Lease renewals are excluded from this schedule.

Tenant

Property

Market

Square Feet
Leased

Space Status

Estimated
Commencement
Date

New /
Expansion

Javelin Energy Partners

Las Colinas Corporate Center I

Dallas

70,053

Vacant

Q1 2024

New

Kimley-Horn and Associates

200 and 222 South Orange Avenue

Orlando

61,348

Vacant

Q4 2023

New

Undisclosed Tenant

One Galleria Tower

Dallas

58,297

Vacant

Q4 2023

New

Presented below is a schedule of leases with abatements of 50,000 square feet or greater that either were under abatement as of March 31, 2023 or will be under abatement within the next twelve months.

Tenant

Property

Market

Abated Square Feet

Lease Commencement Date

Remaining Abatement Schedule

Lease Expiration

Builders FirstSource

6031 Connection Drive

Dallas

55,456

Q3 2022

July 2022 through June 2023

Q2 2035

CVS Caremark

750 West John Carpenter Freeway

Dallas

81,870

Q1 2023

April 2023

Q4 2028

Brand Industrial Services

Galleria 600

Atlanta

50,380

Q1 2023

Early February 2023 through Early February 2024; March 2025

Q3 2034

Kimley-Horn and Associates

200 and 222 South Orange Avenue

Orlando

61,348

Q4 2023

November 2023 through October 2024

Q4 2034

Institute for Justice

Arlington Gateway

Washington, DC

58,285

Q1 2024

January 2024 through June 2025

Q2 2037

Undisclosed Tenant

One Galleria Tower

Dallas

50,130

Q4 2023

January 2024 through June 2025

Q2 2035

Javelin Energy Partners

Las Colinas Corporate Center I

Dallas

70,053

Q1 2024

March 2024 through February 2025

Q1 2035

Piedmont Office Realty Trust, Inc.

Supplemental Operating & Financial Data

Risks, Uncertainties and Limitations

Certain statements contained in this supplemental package 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 known and unknown risks and uncertainties, which could cause actual results to differ materially from those 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,” "estimate," “believe,” “continue” or similar words or phrases that indicate predictions of future events or trends or that do not relate solely to historical matters. Examples of such statements in this supplemental package include: the Company's estimated range of Net Income, Depreciation, Amortization, Core FFO and Core FFO per diluted share for the year ending December 31, 2023. These statements are based on beliefs and assumptions of Piedmont’s management, which in turn are based on information available at the time the statements are made.

Important assumptions relating to the forward-looking statements include, among others, assumptions regarding the demand for office space in the markets in which we operate, competitive conditions, and general economic conditions. These assumptions could prove inaccurate. The forward-looking statements also involve certain known and unknown risks and uncertainties, which could cause our actual results and expectations to differ materially from those described in our forward-looking statements. Many of these factors are beyond our ability to control or predict. Such factors include, but are not limited to, the following: economic, regulatory, socio-economic (including work from home), technological (e.g. Metaverse, Zoom, etc.), and other changes that impact the real estate market generally, the office sector or the patterns of use of commercial office space in general, or the markets where we primarily operate or have high concentrations of Annualized Lease Revenue; the impact of competition on our efforts to renew existing leases or re-let space on terms similar to existing leases; lease terminations, lease defaults, lease contractions, or changes in the financial condition of our tenants, particularly by one of our large lead tenants; impairment charges on our long-lived assets or goodwill resulting therefrom; the success of our real estate strategies and investment objectives, including our ability to implement successful redevelopment and development strategies or identify and consummate suitable acquisitions and divestitures; the illiquidity of real estate investments, including economic changes, such as rising interest rates, which could impact the number of buyers/sellers of our target properties, and regulatory restrictions to which real estate investment trusts ("REITs") are subject and the resulting impediment on our ability to quickly respond to adverse changes in the performance of our properties; the risks and uncertainties associated with our acquisition and disposition of properties, many of which risks and uncertainties may not be known at the time of acquisition or disposition; development and construction delays, including the potential of supply chain disruptions, and resultant increased costs and risks; future acts of terrorism, civil unrest, or armed hostilities in any of the major metropolitan areas in which we own properties, or future cybersecurity attacks against any of our properties or our tenants; risks related to the occurrence of cyber incidents, or a deficiency in our cybersecurity, which could negatively impact our business by causing a disruption to our operations, a compromise or corruption of our confidential information, and/or damage to our business relationships; costs of complying with governmental laws and regulations, including environmental standards imposed on office building owners; uninsured losses or losses in excess of our insurance coverage, and our inability to obtain adequate insurance coverage at a reasonable cost; additional risks and costs associated with directly managing properties occupied by government tenants, such as potential changes in the political environment, a reduction in federal or state funding of our governmental tenants, or an increased risk of default by government tenants during periods in which state or federal governments are shut down or on furlough; significant price and volume fluctuations in the public markets, including on the exchange which we listed our common stock; risks associated with incurring mortgage and other indebtedness, including changing capital reserve requirements on our lenders and rapidly rising interest rates in the public bond markets, could impact our ability to finance properties or refinance existing debt or significantly increase operating/financing costs; a downgrade in our credit rating could materially adversely affect our business and financial condition; the effect of future offerings of debt or equity securities on the value of our common stock; additional risks and costs associated with inflation and continuing increases in the rate of inflation, including the possibility of a recession that could negatively impact our operations and the operations of our tenants and their ability to pay rent; uncertainties associated with environmental and regulatory matters; changes in the financial condition of our tenants directly or indirectly resulting from geopolitical developments that could negatively affect important supply chains and international trade, the termination or threatened termination of existing international trade agreements, or the implementation of tariffs or retaliatory tariffs on imported or exported goods; the effect of any litigation to which we are, or may become, subject; additional risks and costs associated with owning properties occupied by tenants in particular industries, such as oil and gas, hospitality, travel, co-working, etc., including risks of default during start-up and during economic downturns; changes in tax laws impacting REITs and real estate in general, as well as our ability to continue to qualify as a REIT under the Internal Revenue Code of 1986, as amended (the "Code"), or other tax law changes which may adversely affect our stockholders; the future effectiveness of our internal controls and procedures; actual or threatened public health epidemics or outbreaks, such as the COVID-19 pandemic, as well as governmental and private measures taken to combat such health crises, could have a material adverse effect on our business operations and financial results; the adequacy of our general reserve related to tenant lease-related assets or the establishment of any other reserve in the future; and other factors, including the risk factors discussed under Item 1A. of our Annual Report on Form 10-K for the year ended December 31, 2022 and Quarterly Report on Form 10-Q for the three months ended March 31, 2023.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this supplemental report. We cannot guarantee the accuracy of any such forward-looking statements contained in this supplemental report, and we do not intend to and management undertakes no obligations to publicly update or revise any forward-looking statements, which are based on current expectations, whether as a result of new information, future events, or otherwise.

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