Piedmont Realty Trust — Q3 2026 Earnings Summary

Financial Performance:

• Reported a net loss of $21.0 million ($0.17 per diluted share) for the three months ended September 30, 2026, compared to a net loss of $13.5 million ($0.11 per diluted share) in the same period in 2025.
• Net loss for the nine months ended September 30, 2026, was $45.0 million ($0.36 per share), compared to $40.4 million ($0.32 per share) in 2025.
• Core FFO applicable to common stock was $50.1 million ($0.39 per share) for the quarter, up from $43.5 million ($0.35 per share) in 2025; for the nine months, Core FFO was $144.0 million ($1.13 per share) versus $133.5 million ($1.06 per share) in 2025.
• NAREIT FFO applicable to common stock was $29.9 million ($0.23 per share) for the quarter, down from $43.5 million ($0.35 per share) in 2025; for the nine months, NAREIT FFO was $123.8 million ($0.98 per share) versus $125.5 million ($1.00 per share) in 2025.
• Adjusted FFO applicable to common stock was $29.9 million ($0.23 per share) for the quarter, up from $26.5 million ($0.21 per share) in 2025; for the nine months, Adjusted FFO was $84.8 million ($0.67 per share) versus $66.2 million ($0.53 per share) in 2025.
• Same Store NOI on a cash basis increased 7.5% for the quarter and 9.2% for the nine months compared to the prior year periods.
• Same Store NOI on an accrual basis increased 6.9% for the quarter and 3.8% for the nine months compared to the prior year periods.
• Total revenues were $151.2 million for the quarter, an 8.7% increase year-over-year; for the nine months, revenues were $438.7 million, a 3.9% increase year-over-year.
• Interest expense, net of interest income, was $31.9 million for the quarter and $95.6 million for the nine months.
• The quarter included a $20.2 million loss on early extinguishment of debt and an $8.9 million gain on the sale of real estate assets.
• Total debt was $2.34 billion as of September 30, 2026, with a weighted average cost of debt of 4.78% (down from 5.58% at December 31, 2025).
• Net principal amount of debt to total gross assets less cash was 40.9% as of September 30, 2026.
• Average net debt to Core EBITDA (trailing twelve months) was 7.1x as of September 30, 2026.

Guidance and Future Outlook:

• Raised the 2026 Core FFO outlook for the third consecutive quarter; revised guidance is $1.55 to $1.57 per diluted share, compared to an initial outlook of $1.47 to $1.53 per share.
• Revised 2026 NAREIT FFO outlook is $1.39 to $1.41 per diluted share, compared to an initial outlook of $1.47 to $1.53 per share.
• Revised 2026 Net loss outlook is $51 million to $50 million, compared to an initial outlook of $48 million to $44 million.
• Full-year 2026 Same Store NOI growth is projected to be 7.5% to 8.5% on a cash basis and 5% to 6% on an accrual basis.
• Full-year 2026 interest expense (net of interest income) is projected to be $125 million to $126 million.
• Full-year 2026 general and administrative expense is projected to be $31 million to $33 million.
• Full-year 2026 weighted average shares outstanding is projected to be 126 million to 127 million.
• Management expects year-end in-service portfolio leased percentage to be 87.5% to 88.5% and out-of-service portfolio leased percentage to be 85% to 90%.
• The Meridian project is expected to return to service in Q4 2026, and the 9320 Excelsior project is expected to return to service in Q1 2027.

Business Segments and Product Lines:

• Executed approximately 406,000 square feet of leasing in Q3 2026, with cash rent roll-ups of 26.2% and accrual rent roll-ups of 34.6%.
• As of September 30, 2026, the in-service portfolio was 87.7% leased, down from 88.9% at June 30, 2026.
• The out-of-service portfolio, comprising two redevelopment projects in Minneapolis, was 84.7% leased as of September 30, 2026.
• Acquired 4075 Wilson Boulevard in Arlington, VA, for approximately $52.0 million; the 186,000 sq. ft. Class A building is 83% leased with a 5.5-year weighted average lease term.
• Sold a 10.6-acre undeveloped land parcel in Dallas, TX, for $12.0 million.
• Entered a binding contract to sell Enclave Place in Houston, TX, for $81.8 million, with closing anticipated in Q4 2026.
• As of September 30, 2026, the Company had approximately 0.7 million square feet of executed leases yet to commence, representing $29 million in future annual cash rents.
• Approximately 83% of the portfolio is ENERGY STAR rated and 73% is LEED certified, with 67% certified LEED Gold.

Market and Competitive Landscape:

• Leasing demand remained strong, with over 700,000 square feet of leases either executed or in the legal stage in October 2026.
• The Ballston submarket in Arlington, VA, continues to serve as a hub for defense and cybersecurity tenants.
• The Company operates 16 million square feet of Class A office properties primarily in major U.S. Sunbelt markets.
• Senior unsecured notes are investment-grade rated by Moody's (Baa3), Standard & Poor's (BB+), and Fitch (BBB-).

Risks and Challenges:

• Forward-looking statements are subject to risks including economic, regulatory, and technological changes impacting the office sector.
• Risks include lease terminations, defaults, or contractions, particularly from large tenants.
• Potential impairment charges on long-lived assets or goodwill.
• Illiquidity of real estate investments, construction cost increases, and rising interest rates.
• Risks associated with government tenants, including potential funding reductions or political changes.
• Cybersecurity incidents and reputational impacts.
• Risks related to acquisitions and dispositions, including unknown risks at the time of transaction.
• Potential changes in tax laws affecting REIT qualification.

Management Commentary and Tone:

• Brent Smith, President and CEO, described the third quarter as "phenomenal," citing strong leasing demand and the ability to push rental rates to all-time highs.
• Management noted that free rent related to recently executed leases continues to burn off, contributing to Same Store NOI cash growth.
• The capital recycling program was active with the acquisition of 4075 Wilson Boulevard and the disposition of a land parcel.
• Management highlighted the completion of important refinancing activity that significantly improved the weighted average cost of debt and extended the maturity profile.
• The outlook was raised for the third consecutive quarter, with management expressing confidence in the strong leasing pipeline.

Other Key Points:

• Issued $230 million in aggregate principal amount of 2.875% exchangeable senior notes.
• Approximately $50 million of net proceeds from the note issuance was used to repurchase 5.4 million shares of common stock at an average price of $9.20 per share.
• The remaining proceeds, along with proceeds from the at-the-market equity program and borrowings under the $600 million line of credit, were used to redeem all outstanding 9.25% Unsecured Senior Notes due 2028.
• As of September 30, 2026, the Company had approximately $448 million of capacity available on its $600 million revolving line of credit.
• There are no final debt maturity requirements until October 2028.
• The Company published its annual Corporate Responsibility report.