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): August 6, 2007
Piedmont Office Realty Trust, Inc.
(Exact name of registrant as specified in its charter)
Commission File Number: 000-25739
| MD | 58-2328421 | |
| (State or other jurisdiction of incorporation) |
(IRS Employer Identification No.) |
6200 The Corners Parkway
Suite 500
Norcross, GA 30092-3365
(Address of principal executive offices, including zip code)
770-325-3700
(Registrant’s telephone number, including area code)
Wells Real Estate Investment Trust, Inc.
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01 Entry Into a Material Definitive Agreement
Effective August 8, 2007, Piedmont Office Realty Trust, Inc. f/k/a Wells Real Estate Investment Trust, Inc. (the “Registrant”), as general partner of the Registrant’s operating partnership, Wells Operating Partnership, L.P. (“Wells OP”), along with Piedmont Office Holdings, Inc., f/k/a Wells REIT Sub, Inc., amended the limited partnership agreement of Wells Operating Partnership, L.P. (the “Partnership Agreement Amendment”) to cause the name of Wells OP to change from “Wells Operating Partnership, L.P.” to “Piedmont Operating Partnership, LP.” A copy of the Partnership Agreement Amendment is attached hereto as Exhibit 99.1 to this Current Report on Form 8-K.
Item 2.02 Results of Operations and Financial Condition
On August 10, 2007, the Registrant disclosed additional information regarding its results of operations for the second quarter 2007 in a letter to its stockholders. A copy of the letter is attached as Exhibit 99.3 to this Current Report on Form 8-K. Pursuant to the rules and regulations of the Securities and Exchange Commission, such exhibit and the information set forth therein are deemed to have been furnished and shall not be deemed to be “filed” under the Securities Exchange Act of 1934.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year
Effective August 8, 2007, the Registrant amended Article I, Section 1.1 of the Registrant’s Second Articles of Amendment and Restatement solely to change the corporate name from “Wells Real Estate Investment Trust, Inc.” to “Piedmont Office Realty Trust, Inc.” A copy of the Registrant’s Articles of Amendment to Second Articles of Amendment and Restatement, as filed with the State Department of Assessments and Taxation of Maryland, amending Article I, Section 1.1 of the Registrant’s Second Articles of Amendment and Restatement solely to reflect the Registrant’s new corporate name, is attached hereto as Exhibit 3.1 to this Current Report on Form 8-K.
Item 7.01 Regulation FD Disclosure
On August 10, 2007, the Registrant issued a press release regarding the change of the corporate name mentioned above. A copy of the press release is attached as Exhibit 99.4 to this Current Report on Form 8-K. Pursuant to the rules and regulations of the Securities and Exchange Commission, such exhibit and the information set forth therein are deemed to have been furnished and shall not be deemed to be “filed” under the Securities Exchange Act of 1934.
Item 8.01 Other Events
Adoption of Compensation Committee Charter
On August 6, 2007, the Registrant’s board of directors adopted a charter to govern its Compensation Committee (the “Compensation Committee Charter”). A copy of the Compensation Committee Charter is attached hereto as Exhibit 99.2 to this Current Report on Form 8-K.
Declaration of Dividend for the Third Quarter 2007
On August 6, 2007, the Registrant’s board of directors declared dividends for the third quarter of 2007 in the amount of $.1467 (14.67 cents) per share on outstanding common shares of the Registrant to all stockholders of record of such shares as shown on the Registrant’s books at the close of business on August 31, 2007. Such dividends are to be paid on such date during the month of September 2007 as the President of the Registrant may determine.
Letter to Stockholders
On August 10, 2007, the Registrant prepared a letter to be mailed to its stockholders. A copy of the letter is attached as Exhibit 99.3 to this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits.
| (d) | Exhibits: |
| Exhibit No. | Description | |
| 3.1 | Articles of Amendment to Second Articles of Amendment and Restatement, dated August 8, 2007 | |
| 99.1 | Amendment to Agreement of Limited Partnership of Wells Operating Partnership, L.P., as | |
| Amended and Restated as of January 1, 2000, dated August 8, 2007 | ||
| 99.2 | Compensation Committee Charter, adopted August 6, 2007 | |
| 99.3 | Letter to Stockholders, dated August 10, 2007 | |
| 99.4 | Press release, dated August 10, 2007 | |
Signature(s)
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Piedmont Office Realty Trust, Inc. | ||||||
| Date: August 10, 2007 | By: | /s/ Donald A. Miller, CFA | ||||
| Donald A. Miller, CFA | ||||||
| President and Chief Executive Officer | ||||||
Exhibit Index
| Exhibit No. | Description | |
| 3.1 | Articles of Amendment to Second Articles of Amendment and Restatement, dated August 8, 2007 | |
| 99.1 | Amendment to Agreement of Limited Partnership of Wells Operating Partnership, L.P., as Amended and Restated as of January 1, 2000, dated August 8, 2007 | |
| 99.2 | Compensation Committee Charter, adopted August 6, 2007 | |
| 99.3 | Letter to Stockholders, dated August 10, 2007 | |
| 99.4 | Press release, dated August 10, 2007 | |
Exhibit 3.1
WELLS REAL ESTATE INVESTMENT TRUST, INC.
ARTICLES OF AMENDMENT
TO
SECOND ARTICLES OF AMENDMENT AND RESTATEMENT
Wells Real Estate Investment Trust, Inc., a Maryland corporation (the “Company”), hereby certifies to the State Department of Assessments and Taxation of Maryland that:
FIRST: Article I, Section 1.1 of the Company’s Second Articles of Amendment and Restatement, is hereby amended to read:
NAME. The name of the corporation (the “Company”) is: “Piedmont Office Realty Trust, Inc.”
Under circumstances in which the Board of Directors determines that use of the name “Piedmont Office Realty Trust, Inc.” is not practicable, it may use any other designation or name for the Company.
SECOND: This amendment to Second Articles of Amendment and Restatement was approved by a majority of the entire Board of Directors of the Company. This amendment is limited to a change expressly authorized by Section 2-605 of the Maryland General Corporation Law to be made without action by the Company’s stockholders.
THIRD: The undersigned President and Chief Executive Officer acknowledges these Articles of Amendment to be the corporate act of the Corporation and as to all matters or facts required to be verified under oath, the undersigned President and Chief Executive Officer acknowledges that to the best of his knowledge, information and belief theses matters and facts are true in all material respects and that this statement is made under the penalties for perjury.
Except as amended hereby, the rest and remainder of the Company’s Second Articles of Amendment and Restatement shall be and remain in full force and effect.
Signatures on Following Page
IN WITNESS WHEREOF, the Company has caused these Articles of Amendment to the Second Amended and Restated Articles of Incorporation to be signed in its name and on its behalf by its President and Chief Executive Officer and attested to by its Secretary as of the 8th day of August, 2007.
| WELLS REAL ESTATE INVESTMENT TRUST, INC. | ||
| By: | ||
| Name: | Donald A. Miller, CFA | |
| Title: | President and Chief Executive Officer | |
| ATTEST: | ||
| By: | ||
| Name: | Robert E. Bowers | |
| Title: | Secretary | |
Exhibit 99.1
AMENDMENT TO
SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF
WELLS OPERATING PARTNERSHIP, L.P.
This Amendment (“Amendment”) to that certain Agreement of Limited Partnership of Wells Operating Partnership, L.P., as Amended and Restated as of January 1, 2000, as further amended by Second Amended and Restated Agreement of Limited Partnership as of April 16, 2007 (the “Agreement”), is made and entered into effective as of the 8th day of August, 2007 (the “Effective Date”) and is entered into by and between PIEDMONT OFFICE REALTY TRUST, INC., f/k/a Wells Real Estate Investment Trust, Inc. (the “General Partner”), and PIEDMONT OFFICE HOLDINGS, INC., f/k/a Wells REIT Sub, Inc., a Georgia corporation and a direct, wholly-owned subsidiary of the General Partner (“LPSub”).
RECITALS
WHEREAS, the General Partner has determined it to be in the best interest of the Partnership and the stockholders of the General Partner to change the name of the Partnership to Piedmont Operating Partnership, LP; and
WHEREAS, consistent with Article XI of the Second Amended and Restated Agreement of Limited Partnership, the General Partner has the authority to cause the name of the Partnership to be changed;
NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows:
1. The name of the Partnership is hereby changed to: “PIEDMONT OPERATING PARTNERSHIP, LP.”
[SIGNATURES CONTINUE ON NEXT PAGE]
IN WITNESS WHEREOF, the parties hereto have executed, sealed and sworn to this Amendment, effective as of the 8th day of August, 2007.
| Signed, sealed and sworn to the 8th day of August, 2007 in the presence of: |
GENERAL PARTNER: PIEDMONT OFFICE REALTY TRUST, INC., f/k/a Wells Real Estate Investment Trust, Inc. A Maryland Corporation | |||||
| By: | ||||||
| Witness | Donald A. Miller, CFA, President | |||||
| Notary Public (Affix Date of Expiration of Commission and Notarial Seal |
||||||
| Signed, sealed and sworn to on the 8th day of August, 2007 in the presence of: |
LIMITED PARTNER: PIEDMONT OFFICE HOLDINGS, INC. f/k/a Wells REIT Sub, Inc. | |||||
| By: | ||||||
| Witness | Donald A. Miller, CFA, President | |||||
| Notary Public (Affix Date of Expiration of Commission and Notarial Seal |
||||||
Exhibit 99.2
COMPENSATION COMMITTEE CHARTER
OF
PIEDMONT OFFICE REALTY TRUST, INC.
As Adopted on August 6, 2007
| I. | PURPOSE |
The Compensation Committee’s purpose and responsibilities are generally to: (i) review and approve corporate goals and objectives relevant to the compensation of the Chief Executive Officer (“CEO”) of Piedmont Office Realty Trust, Inc. (the “Company”), evaluate the CEO’s performance in light of those goals and objectives, and, either as a committee or together with the other independent directors (as directed by the Board of Directors), determine and approve the CEO’s compensation level and structure based on such evaluation; (ii) review and approve non-CEO executive officer compensation and plans or, if the Committee deems it advisable, to instead make recommendations to the Board of Directors (the “Board”) with respect to such compensation; (iii) review, implement and administer our incentive-compensation and equity-based plans or, if the Committee deems it advisable, to instead make recommendations to the Board with respect to such plans; (iv) to make recommendations to the Board regarding compensation of the Company’s non-employee directors; (v) prepare a Compensation Committee Report on executive officer compensation to be included in the Company’s annual proxy statement and/or annual report on Form 10-K, as may be required by applicable rules and regulations of the Securities and Exchange Commission (the “SEC”); and (vi) review and discuss with management the compensation discussion and analysis (“CD&A”) and determine whether to recommend to the Board that the CD&A be included in the Company’s annual proxy statement and/or annual report on Form 10-K, as may be required by applicable SEC rules and regulations.
| II. | COMPOSITION |
The Compensation Committee shall be comprised of at least three of the independent directors of the Company, each of whom must meet: (i) the “independence” requirements as defined in the listing standards of the New York Stock Exchange Listed Company Manual; and (ii) any other legal requirements relevant to the proper administration of the Company’s compensation plans and programs, including the requirements under the federal securities laws and the Internal Revenue Code of 1986, as amended. The members of the Compensation Committee shall be appointed annually by the Company’s Board of Directors and may be replaced or removed by the Board at any time with or without cause. Resignation or removal of a member of the Compensation Committee from the Board, for whatever reason, shall automatically constitute resignation or removal, as applicable, from the Compensation Committee. Vacancies occurring on the Compensation Committee, for whatever reason, may be filled by the Board. The Board shall designate one member of the Compensation Committee to serve as the Chairman of the Compensation Committee.
| III. | MEETINGS |
The Compensation Committee shall meet at least once annually, or more frequently as the Committee determines is appropriate to carry out its responsibilities under this Charter. Such meetings shall be in person or by conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other. A majority of the members of the Compensation Committee shall constitute a quorum for purposes of holding a meeting, and the Compensation Committee may act by a vote of a majority of members present
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at such meeting. In lieu of a meeting, the Compensation Committee may act by unanimous written consent. The Chairman of the Compensation Committee, in consultation with the other committee members and management, may determine the frequency and length of the committee meetings and may set meeting agendas consistent with this Charter.
| IV. | AUTHORITY AND RESPONSIBILITIES |
The Compensation Committee’s authority and responsibilities are set forth below.
| 1. | Review and approve the Company’s corporate goals and objectives with respect to the compensation of the CEO; evaluate the CEO’s performance in light of those goals and objectives that are set forth for the CEO and determine and approve the CEO’s compensation (including annual base salary level, annual cash bonus, long-term incentive compensation awards, perquisites and any special or supplemental benefits) based on such evaluation. In determining the incentive component of the CEO’s compensation, the Compensation Committee may consider the Company’s performance and relative stockholder return, the value of similar incentive awards to comparable officers at comparable companies, the awards given to the CEO in prior years, and any other factors set forth in the Company’s compensation plans. |
| 2. | Review and approve the compensation of all executive officers other than the CEO or, if the Committee deems it advisable, to instead make recommendations to the Board with respect to such compensation (including annual base salary level, annual cash bonus, long-term incentive compensation awards, perquisites and any special or supplemental benefits). |
| 3. | Make such recommendations to the Board with respect to the compensation of all non-employee directors, including Board and committee retainers, meeting fees, equity-based compensation and such other compensation as the Compensation Committee may deem advisable. |
| 4. | Review perquisites or other personal benefits to the executive officers and directors and make any recommendations to the Board with respect to such perquisites or other personal benefits. |
| 5. | Review and approve grants and awards under all incentive-based compensation plans and equity-based plans unless the Compensation Committee deems it advisable for the Board to approve any such grants or awards, in which case the Compensation Committee shall make recommendations to the Board with respect to such grants and awards. |
| 6. | Unless otherwise provided in a plan document or resolution of the Board, the Compensation Committee shall administer the Company’s incentive-based and equity-based compensation plans in accordance with the terms of the plans and take such actions and make such determinations as required or provided for under the plans to the fullest extent permitted under the plans, including the power and authority to grant stock options and other awards under the plans and to authorize the issuance of shares of the Company’s common stock upon exercise of stock options or other awards granted pursuant to the terms of the plans. |
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| 7. | Review and approve any new incentive-based, equity-based or other compensation plan or any material changes to such existing plans whether or not subject to stockholder approval. The Compensation Committee shall make recommendations to the Board with respect to the adoption of any new, or the amendment of any existing, incentive-based, equity-based or other compensation plans. |
| 8. | Review and approve any severance or similar termination payments proposed to be made to any current or former executive officer. |
| 9. | Prepare a Compensation Committee Report on executive compensation to be included in the Company’s proxy statement relating to its annual meeting of stockholders and/or annual report on Form 10-K, as may be required by applicable rules and regulations of the SEC. |
| 10. | Review and discuss with management the Company’s CD&A and, based on that review and discussion, make a recommendation to the Board regarding whether to include the CD&A in the Company’s annual proxy statement and/or annual report on Form 10-K, as may be required by rules and regulations of the SEC. |
| 11. | Exercise any of the powers of the Board not specifically delegated hereunder with respect to the compensation of non-officer employees. |
| 12. | Establish and delegate authority to one or more subcommittees consisting of one or more of its members when the Compensation Committee may deem it appropriate to do so in order to carry out its responsibilities hereunder. |
| 13. | Make regular reports to the Board concerning matters within the Compensation Committee’s responsibility hereunder. |
| 14. | Perform an annual performance review and self-evaluation of the Compensation Committee and report the results of such evaluation to the Board or otherwise in accordance with the Company’s policies for committee self-evaluations. |
| 15. | Review and reassess the adequacy of this Charter annually and recommend to the Board any amendments or modifications that the Compensation Committee may deem appropriate. If a revision to the Charter is recommended, such revision shall be presented to the Board after consultation and review with the Company’s counsel. |
| 16. | Perform such other functions as may be assigned to it by the Board from time to time. |
In carrying out its responsibilities, the Compensation Committee shall be entitled to rely upon advice and information that it receives in its discussions and communications with management and such experts, advisors and professionals with whom the Compensation Committee may consult. The Compensation Committee, in discharging its responsibilities, shall have full access to any relevant records of the Company and shall have the authority to request that any officer or employee of the Company, the Company’s outside legal counsel, the Company’s independent auditor or any other professional retained by the Company to render advice to the Company to attend a meeting of the Compensation Committee or to meet with any members of or advisors to the Compensation Committee. The Compensation Committee shall also have the authority to engage legal, accounting, or other advisors to provide it with advice
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and information in connection with carrying out its responsibilities hereunder. The Compensation Committee shall have the sole authority to approve the fees and other retention terms of such advisors.
| V. | WEBSITE DISCLOSURE |
This Charter shall be posted on the Company’s website.
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Exhibit 99.3
August 10, 2007
Dear Wells REIT Stockholder:
During the past quarter, as a result of our internalization transaction, Wells Real Estate Investment Trust, Inc. (the “Company”) became one of the largest self-managed office REITs in the country. We want to thank you for your support and confidence expressed to us during this period. Also, I want to take this opportunity to update you on our operating results during this transitional quarter and to highlight our strategic progress as an office REIT by covering a number of recent developments:
| Quarterly Financial Results | Internalization Transaction | Market Conditions | ||
| Dividend Declaration | Name Change | Shareholder Liquidity | ||
| Portfolio Summary | Changes in Board of Directors | |||
Quarterly financial results:
During the quarter ended June 30, 2007, net income available to common stockholders (diluted) (“EPS”) was $0.06 per share, consistent with the second quarter of 2006. Funds from Operations (“FFO”) was $0.14 per share (diluted) for the second quarter of 2007 compared with $0.15 per share for the second quarter of 2006. The Company uses the National Association of Real Estate Investment Trusts definition of FFO as an operating measure of the Company’s financial performance. A reconciliation of FFO to GAAP net income is included in Exhibit A accompanying this letter.
Dividend declaration:
On August 6, 2007, the board of directors declared dividends for the third quarter of 2007 in the amount of $0.1467 per share on the outstanding common shares of the Company to all stockholders of record of such shares as shown on the books of the Company at the close of business on August 31, 2007. The dividend will be paid at the end of September.
Portfolio summary:
With approximately $5 billion in property assets, the Company ranks as one of the largest office property owners in the United States. As of June 30, 2007, our properties contained more than 21 million square feet, and were primarily comprised of Class A properties including Chicago’s Aon Center — the third tallest building in the United States — and the corporate headquarter buildings for such companies as Cingular/AT&T Wireless, U.S. Bancorp and Nestlé USA. Across the portfolio, the Company’s properties are approximately 94 percent leased.
In addition, on July 16, 2007, Standard & Poor’s Ratings Services assigned its ‘BBB’ corporate credit rating and a stable outlook to the Company and on July 19, 2007, Moody’s assigned its ‘Baa3’ rating and stable outlook to Wells Operating Partnership, LP. These investment grade ratings will assist us in obtaining future strategic debt financing at the lowest possible cost. Achieving these ratings as a first-time applicant is evidence of our stable portfolio of high-quality assets and financial flexibility to support the Company’s growth and operating objectives.
Internalization transaction:
In April, we became self-managed through the acquisition of two companies previously providing advisory and management services to us, which transaction is described in detail in our public filings. This internalization transaction should yield greater operating efficiencies and is expected to be accretive to our earnings in 2008 as a result of the reduction in operating costs formerly associated with paying external service providers. 94% of the shareholders who submitted votes in connection with the internalization voted in favor of the transaction. As a result of the transaction, we have been able to establish a dedicated management team with approximately 100 employees nationwide and expand our local operating presence with satellite offices in seven large U.S. office markets.
Name change:
Effective today, we are changing our name to Piedmont Office Realty Trust, Inc. (“Piedmont”). Further, our new corporate website is available at www.PiedmontREIT.com. We believe the Company’s name change is a natural progression in our stated strategy of differentiating ourselves as a unique, high quality, self-advised office REIT. We are excited to continue to grow this portfolio of properties under the Piedmont brand.
Changes to the Board of Directors:
Mr. Leo F. Wells, III has served on our Board of Directors (the “Board”) since 1997. Because he currently serves on two Wells’-sponsored office property REIT boards, Mr. Wells resigned from our Board on May 9, 2007 to avoid the appearance of any conflicts of interest. We would like to thank Leo for all of his work and dedication in helping build the Company into what it is today.
Wesley E. Cantrell has filled Mr. Wells’ vacancy on the Board. Mr. Cantrell was employed by Lanier Worldwide, Inc., (formerly NYSE: LR) a global document management company, from 1955 until his retirement in 2001 as Chairman and Chief Executive Officer. Mr. Cantrell is also currently a director for Ann Taylor Stores Corporation (NYSE: ANN), a publicly traded women’s specialty retailer listed on the NYSE, and previously served as a director for First Union National Bank of Atlanta. More recently, in May 2007, Mr. Cantrell co-authored the book, High-Performance
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Ethics: 10 Timeless Principles for Next-Generation Leadership. The book emphasizes integrity and ethical decision-making as essential elements for any successful business.
Today, our Board consists of six members, five of whom are considered independent under the NYSE independence standards as determined by our Board. On May 9, 2007, the Board elected W. Wayne Woody to serve as the interim chairman of the Board. Mr. Woody has served as an independent director of our Company since 2003 and also serves in the capacity as a financial expert for the Board’s audit committee. As more fully disclosed in our public filings, Mr. Woody has had a distinguished financial career including serving for many years as Securities and Exchange Commission Reviewing Partner and Partner-in-Charge of Professional Practice for the southeastern United States and Puerto Rico, with the international accounting firm KPMG.
In addition to Wayne Woody, Wesley Cantrell and me, the Board includes: Michael R. Buchanan who had a 30 year career in real estate, formerly serving as Managing Director of Bank of America’s Real Estate Banking Group and he currently serves on the board of directors of D. R. Horton (NYSE: DHI); William H. Keogler, Jr. who had an outstanding investment advisory and securities banking career including serving on the board of directors of Robinson-Humphrey, Inc.; and Donald S. Moss who has served in many senior management positions with Avon Products, Inc. (NYSE: AVP) including Group Vice President Operations-Worldwide and Senior Vice President Sales-Worldwide. We are extremely fortunate to have these individuals on our Board.
Market Conditions:
Given the recent turbulence in the equity and credit markets, we want to remind you of the creditworthiness of our Company’s tenants with approximately 91% of our annualized gross rent derived from tenants that have investment grade ratings, are subsidiaries of investment grade companies, are government agencies or are nationally recognized corporations or professional service firms. Also, our leverage ratios are among the lowest in the office sector. We believe this low leverage provides significant balance sheet flexibility and, combined with the quality of our assets and the credit quality of our tenants, positions us well in the current economic environment.
Shareholder Liquidity:
Under the Company’s organizational documents, we must provide liquidity to our shareholders or commence an orderly liquidation of our assets by January 30, 2008. In order to satisfy this requirement, we filed a registration statement on Form S-11 on May 23, 2007, and have taken the steps necessary to be in a position to list our shares. However, we will only pursue the listing if market conditions are appropriate. Given the challenging current market conditions, your Board, in consultation with its financial and investment banking advisors has reviewed and will continue to review all options to provide for liquidity and to maximize shareholder value. We are fortunate to have a Company with quality assets and tenants and very little leverage. These operational and balance sheet strengths provide us the flexibility to continue to review market
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conditions and make decisions regarding liquidity options that we believe will maximize the long-term return of our shareholders.
We recommend that you access our Web site at www.PiedmontREIT.com for updates on additional matters. Should you have any questions, please contact our Investor Services Department at 800-557-4830 or via e-mail at investor.services@piedmontreit.com.
Again, we appreciate your trust in support of Piedmont and its Board of Directors.
Sincerely,
Donald A. Miller, CFA
Chief Executive Officer
Piedmont Office Realty Trust, Inc.
(f/k/a Wells Real Estate Investment Trust, Inc.)
This letter may contain forward-looking statements about Piedmont Office Realty Trust, Inc. Such statements involve risks and uncertainties, which could cause actual results to vary materially from those expressed in or indicated by the forward-looking statements. Accordingly, readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this letter. Factors that may cause actual results to differ materially include changes in general economic conditions, changes in real estate conditions, the potential need to fund capital expenditures out of operating cash flow, increases in interest rates, lease-up risks, lack of availability of financing and lack of availability of capital proceeds. Piedmont Office Realty Trust, Inc. is closed to new investors.
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EXHIBIT A
Funds From Operations (“FFO”)
FFO is a non-GAAP financial measure and should not be viewed as an alternative measurement of our operating performance to net income. As presented below, FFO is adjusted to exclude the impact of certain noncash items, such as depreciation, amortization, and gains on the sale of real estate assets. However, FFO is not adjusted to exclude the impact of impairment losses or certain other noncash charges to earnings. Reconciliations of net income to FFO are presented below (in thousands):
| Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||
| Net income |
$ | 28,196 | $ | 28,394 | $ | 78,323 | $ | 59,741 | ||||||||
| Add: |
||||||||||||||||
| Depreciation of real assets — wholly owned properties |
23,488 | 23,033 | 47,200 | 46,321 | ||||||||||||
| Depreciation of real assets — unconsolidated partnerships |
359 | 360 | 725 | 719 | ||||||||||||
| Amortization of lease-related costs — wholly owned properties |
17,443 | 17,517 | 34,691 | 34,831 | ||||||||||||
| Amortization of lease-related costs — unconsolidated partnerships |
294 | 286 | 590 | 535 | ||||||||||||
| Subtract: |
||||||||||||||||
| Gain on sale of properties — wholly owned |
(17 | ) | (1,184 | ) | (20,670 | ) | (1,184 | ) | ||||||||
| Gain on sale of properties — unconsolidated partnerships |
(1,123 | ) | — | (1,130 | ) | — | ||||||||||
| FFO |
$ | 68,640 | $ | 68,406 | $ | 139,729 | $ | 140,963 | ||||||||
| Weighted-average shares outstanding – diluted (000’s) |
480,983 | 461,064 | 473,660 | 462,519 | ||||||||||||
| FFO per share – diluted |
$ | 0.14 | $ | 0.15 | $ | 0.29 | $ | 0.30 | ||||||||
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Exhibit 99.4
| FOR IMMEDIATE RELEASE | Media Contact: Margot Olcay Rubenstein Communications (212) 843-8267 |
Wells REIT Changes Name to Piedmont Office Realty Trust
New Website: www.piedmontreit.com
NORCROSS, Ga. (August 10, 2007) — Wells Real Estate Investment Trust Inc., which became a self-managed office REIT this spring, announced today its new name: Piedmont Office Realty Trust, Inc. The REIT, one of the largest office REIT’s in the country, was incorporated in 1997 but utilized external advisors to acquire and manage its properties until it internalized its management team in April 2007. Piedmont currently owns approximately $5 billion in assets, including more than 80 buildings nationwide, specializing in multi-tenant Class-A office buildings.
“The name change is a natural progression in our strategy of differentiating ourselves as a unique, self-managed REIT,” said Donald A. Miller, CFA, Piedmont’s president and CEO. The company is also launching a new website, www.piedmontreit.com which contains a gallery of its properties.
Piedmont Office Realty Trust currently owns 82 buildings located primarily in the ten largest U. S. office markets (based upon rentable square feet) totaling more than 21 million square feet in 23 states (including Washington, D.C.) Properties include the corporate headquarters of such organizations as AT&T Wireless/Cingular, U.S. Bancorp, NASA and Nestle USA. Across the portfolio, Piedmont properties are approximately 94 percent leased, and 91% of its tenants (based upon gross rent revenues) are rated investment-grade according to Standard & Poor’s, are subsidiaries of investment-grade entities, are governmental agencies, or are nationally recognized corporations or professional service firms. For more information, see www.piedmontreit.com.
This press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including discussions regarding Piedmont’s use of proceeds and certain other factors that may affect future earnings or financial results. Such statements involve risks and uncertainties, which could cause actual results to vary materially from those expressed in or indicated by the forward-looking statements. Accordingly, readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Factors that may cause actual results to differ materially include changes in general economic conditions, changes in real estate conditions, construction delays, increases in interest rates, lease-up risks, lack of availability of financing, and lack of availability of capital proceeds. Piedmont is closed to new investors. SEC filings: www.sec.gov.
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