Piedmont Office Realty Trust Reports Third Quarter 2019 Results
Highlights for the Quarter Ended
- Reported net income applicable to common stockholders of
$8.4 million, or $0.07per diluted share, for the quarter ended September 30, 2019, as compared with $16.1 million, or $0.13per diluted share, for the quarter ended September 30, 2018;
- Achieved Core Funds From Operations ("Core FFO") of
$0.45per diluted share for the quarter ended September 30, 2019, comparable to $0.45per diluted share for the quarter ended September 30, 2018;
- Completed approximately 564,000 square feet of leasing during the quarter ended
September 30, 2019, with approximately 195,000 square feet related to new leasing;
- Reported a 9.8% and 23.5% roll up in cash and accrual rents, respectively, on executed leases for space vacant one year or less and a 5.0% increase in Same Store NOI-Cash Basis as compared to the quarter ended
September 30, 2018;
- Acquired Galleria 400 and 600, totaling approximately 860,000 square feet, and an adjacent land parcel. The Galleria is a master-planned, mixed-use development in northwest
Atlantathat includes five buildings and three development sites. Piedmont'sacquisition of Galleria 400 and 600 consolidates the 2.1 million square foot, multi-tenant, office component under a single owner for the first time in the development's existence;
- Sold one non-strategic asset during the quarter, The Dupree, a six-story, approximately 138,000-square foot, office building located in
Subsequent to Quarter End:
October 28, 2019, completed the sale of 500 West Monroe Street, a 46-story, approximately 967,000 square foot, 100% leased, trophy office building located in the West Loop submarket of downtown Chicago, ILfor a gross sales price of $412 million, or $426psf; and
New York StateCommissioner of General Services executed an approximately 20-year, 523,000-square foot, renewal and expansion on behalf of the State of New Yorkat 60 Broad Streetin New York City.
Commenting on the quarter's results,
'Equally exciting is the execution post quarter-end of an approximately 20-year lease with the
Results for the Quarter ended
Funds From Operations ("FFO") and Core FFO, which remove the impact of the impairment loss mentioned above, as well as depreciation and amortization, were both
Total revenues and property operating costs were
General and administrative expense was
During the three months ended
Dallas: Commercial Metals Companyrenewed approximately 106,000 sf at 6565 North MacArthur Blvd, and Gartner, Inc.expanded their footprint with a new lease for approximately 55,000 sf at 6031 Connection Drive;
Atlanta: WeWork signed a new lease for approximately 72,000 sf at 1155 Perimeter Center West;
- In Minneapolis:
Siemens Corporationrenewed approximately 69,000 sf at Crescent Ridge II; and,
Boston: Qualcomm Incorporatedrenewed approximately 49,000 sf at 90 Central Street.
Additionally, subsequent to quarter end the
During the three months ended
Additionally during the third quarter,
Subsequent to the end of the third quarter,
Fourth Quarter 2019 Dividend Declaration
Guidance for 2019
Based on management's expectations, the Company has narrowed its previously provided guidance for the year ending
|(in millions, except per share data)||Low||High|
|Less: Gain on Sale of Real Estate Assets||(198||)||-||(201||)|
|NAREIT FFO applicable to common stock||$||220||-||$||223|
|NAREIT FFO per diluted share||$||1.74||-||$||1.77|
|Less: Retirement and Separation Expenses Associated with Senior Management Transition||3||-||3|
|Core FFO applicable to common stock||$||223||-||$||226|
|Core FFO per diluted share||$||1.77||-||$||1.79|
These estimates reflect management's view of current market conditions and incorporate certain economic and operational assumptions and projections, including the impacts of completed transactional activity. The guidance does not include any speculative acquisition or disposition activity for the remainder of the year. Actual results could differ materially from these estimates based on a variety of factors, particularly the timing of any future acquisitions and dispositions, as well as those factors discussed under "Forward Looking Statements" below.
Note that individual quarters may fluctuate on both a cash basis and an accrual basis due to lease commencements and expirations, abatement periods, the timing of repairs and maintenance expenses, capital expenditures, capital markets activities, seasonal general and administrative expenses, accrued potential performance-based compensation expenses, and one-time revenue or expense events. In addition, the Company's guidance is based on information available to management as of the date of this release.
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
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
Quarterly supplemental information as of and for the period ended
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 risks and uncertainties, as well as known and unknown risks, which could cause actual results to differ materially from those projected or anticipated. Therefore, such statements are not intended to be a guarantee of the Company`s performance in future periods. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as "may," "will," "expect," "intend," "anticipate," "believe," "continue" or similar words or phrases that are predictions of future events or trends and which do not relate solely to historical matters. Examples of such statements in this press release include the Company's estimated range of Net Income, Depreciation, Amortization, Gain on Sale of Real Estate Assets, NAREIT FFO/Core FFO and NAREIT FFO/Core FFO per diluted share for the year ending
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 and/or technology changes (including accounting standards) that impact the real estate market generally, or that could affect patterns of use of commercial office space; the impact of competition on our efforts to renew existing leases or re-let space on terms similar to existing leases; changes in the economies and other conditions affecting the office sector in general and the specific markets in which we operate; lease terminations or lease defaults, particularly by one of our large lead tenants; adverse market and economic conditions, including any resulting impairment charges on both our long-lived assets or goodwill resulting therefrom; the success of our real estate strategies and investment objectives, including our ability to identify and consummate suitable acquisitions and divestitures; the illiquidity of real estate investments, including regulatory restrictions to which 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 and resultant increased costs and risks; our real estate development strategies may not be successful; future acts of terrorism in any of the major metropolitan areas in which we own properties, or future cybersecurity attacks against us or any of our tenants; costs of complying with governmental laws and regulations; additional risks and costs associated with directly managing properties occupied by government tenants; significant price and volume fluctuations in the public markets, including on the exchange which we listed our common stock; the effect of future offerings of debt or equity securities or changes in market interest rates on the value of our common stock; changes in the method pursuant to which the LIBOR rates are determined and the potential phasing out of LIBOR; uncertainties associated with environmental and other regulatory matters; potential changes in political environment and reduction in federal and/or state funding of our governmental tenants, including an increased risk of default by government tenants during periods in which state or federal governments are shut down or on furlough; any change in the financial condition of any of our large lead tenants; changes in the financial condition of our tenants directly or indirectly resulting from the United Kingdom’s referendum to withdraw from the
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.
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Source: Piedmont Office Realty Trust, Inc.