Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2023 | Apr. 27, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-34626 | |
Entity Registrant Name | Piedmont Office Realty Trust, Inc. | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 58-2328421 | |
Entity Address, Address Line One | 5565 Glenridge Connector Ste. 450 | |
Entity Address, City or Town | Atlanta | |
Entity Address, State or Province | GA | |
Entity Address, Postal Zip Code | 30342 | |
City Area Code | 770 | |
Local Phone Number | 418-8800 | |
Title of 12(b) Security | Common Stock, $0.01 par value | |
Trading Symbol | PDM | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 123,642,953 | |
Entity Central Index Key | 0001042776 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Real estate assets, at cost: | ||
Land | $ 567,244 | $ 567,244 |
Buildings and improvements, less accumulated depreciation of $947,209 and $915,010 as of March 31, 2023 and December 31, 2022, respectively | 2,767,363 | 2,766,990 |
Intangible lease assets, less accumulated amortization of $83,997 and $90,694 as of March 31, 2023 and December 31, 2022, respectively | 106,183 | 114,380 |
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, net of allowance for doubtful accounts of $600 and $1,000 as of March 31, 2023 and December 31, 2022, respectively | 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, less accumulated amortization of $206,053 and $221,731 as of March 31, 2023 and December 31, 2022, respectively | 280,641 | 284,248 |
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 as of March 31, 2023 and December 31, 2022, 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 | 0 | 25,357 |
Deferred income | 67,056 | 59,977 |
Intangible lease liabilities, less accumulated amortization of $35,789 and $36,423 as of March 31, 2023 and December 31, 2022, respectively | 53,494 | 56,949 |
Interest rate swaps | 394 | 0 |
Total liabilities | 2,417,363 | 2,236,270 |
Commitments and Contingencies (Note 6) | 0 | 0 |
Stockholders’ Equity: | ||
Shares-in-trust, 150,000,000 shares authorized; none outstanding as of March 31, 2023 or December 31, 2022 | 0 | 0 |
Preferred stock, no par value, 100,000,000 shares authorized; none outstanding as of March 31, 2023 or December 31, 2022 | 0 | 0 |
Common stock, $0.01 par value, 750,000,000 shares authorized; 123,642,953 and 123,439,558 shares issued and 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) |
Accumulated other comprehensive loss | (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 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Assets: | ||
Intangible lease assets, accumulated amortization | $ 83,997 | $ 90,694 |
Tenant receivables, allowance for doubtful accounts | 600 | 1,000 |
Deferred lease costs, accumulated amortization | 206,053 | 221,731 |
Liabilities: | ||
Discount (premiums) and unamortized debt issuance costs | 14,045 | 13,319 |
Intangible lease liabilities, accumulated amortization | $ 35,789 | $ 36,423 |
Stockholders’ Equity: | ||
Shares-in-trust, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Shares-in-trust, shares outstanding (in shares) | 0 | 0 |
Preferred stock, par value (in dollars per share) | $ 0 | $ 0 |
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 750,000,000 | 750,000,000 |
Common stock, shares issued (in shares) | 123,642,953 | 123,439,558 |
Common stock, shares outstanding (in shares) | 123,642,953 | 123,439,558 |
Building and improvements | ||
Assets: | ||
Buildings and improvements, accumulated depreciation | $ 947,209 | $ 915,010 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenues: | ||
Rental and tenant reimbursement revenue | $ 136,829 | $ 131,912 |
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 |
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 | 0 | 50,673 |
Other income (expense): | (20,421) | 38,799 |
Net income/(loss) | (1,364) | 59,964 |
Net income applicable to noncontrolling interest | (3) | 0 |
Net income/(loss) applicable to Piedmont | $ (1,367) | $ 59,964 |
Per share information – basic and diluted: | ||
Net income/(loss) applicable to common stockholders - basic (in dollars per share) | $ (0.01) | $ 0.49 |
Net income/(loss) applicable to common stockholders - diluted (in dollars per share) | $ (0.01) | $ 0.49 |
Weighted-average common shares outstanding – basic (in shares) | 123,550,047 | 123,225,145 |
Weighted-average common shares outstanding – diluted (in shares) | 123,550,047 | 123,509,990 |
Property management fee revenue | ||
Revenues: | ||
Property management fee revenue and other property related income | $ 507 | $ 651 |
Other property related income | ||
Revenues: | ||
Property management fee revenue and other property related income | $ 5,031 | $ 3,586 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net income/(loss) applicable to Piedmont | $ (1,367) | $ 59,964 |
Other comprehensive income: | ||
Effective portion of gain/(loss) on derivative instruments that are designated and qualify as cash flow hedges (See Note 4) | (1,103) | 3,876 |
Plus: Reclassification of net loss/(gain) included in net income (See Note 4) | (484) | 705 |
Other comprehensive income/(loss) | (1,587) | 4,581 |
Comprehensive income/(loss) applicable to Piedmont | $ (2,954) | $ 64,545 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Cumulative Distributions in Excess of Earnings | Accumulated Other Comprehensive Income/(Loss) | Non- controlling Interest |
Beginning balance (in shares) at Dec. 31, 2021 | 123,077,000 | |||||
Beginning balance at Dec. 31, 2021 | $ 1,787,423 | $ 1,231 | $ 3,701,798 | $ (1,899,081) | $ (18,154) | $ 1,629 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Dividends to common stockholders and stockholders of subsidiaries | (25,905) | (25,899) | (6) | |||
Shares issued and amortized under the 2007 Omnibus Incentive Plan, net of tax (in shares) | 254,000 | |||||
Shares issued and amortized under the 2007 Omnibus Incentive Plan, net of tax | 4,411 | $ 2 | 4,409 | |||
Net income applicable to noncontrolling interest | 0 | |||||
Net income/(loss) applicable to Piedmont | 59,964 | 59,964 | ||||
Other comprehensive loss | 4,581 | 4,581 | ||||
Ending balance (in shares) at Mar. 31, 2022 | 123,331,000 | |||||
Ending balance at Mar. 31, 2022 | $ 1,830,474 | $ 1,233 | 3,706,207 | (1,865,016) | (13,573) | 1,623 |
Beginning balance (in shares) at Dec. 31, 2022 | 123,439,558 | 123,440,000 | ||||
Beginning balance at Dec. 31, 2022 | $ 1,849,255 | $ 1,234 | 3,711,005 | (1,855,893) | (8,679) | 1,588 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Dividends to common stockholders and stockholders of subsidiaries | (25,971) | (25,965) | (6) | |||
Shares issued and amortized under the 2007 Omnibus Incentive Plan, net of tax (in shares) | 203,000 | |||||
Shares issued and amortized under the 2007 Omnibus Incentive Plan, net of tax | (236) | $ 2 | (238) | |||
Net income applicable to noncontrolling interest | 3 | 3 | ||||
Net income/(loss) applicable to Piedmont | (1,367) | (1,367) | ||||
Other comprehensive loss | $ (1,587) | (1,587) | ||||
Ending balance (in shares) at Mar. 31, 2023 | 123,642,953 | 123,643,000 | ||||
Ending balance at Mar. 31, 2023 | $ 1,820,097 | $ 1,236 | $ 3,710,767 | $ (1,883,225) | $ (10,266) | $ 1,585 |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||
Dividends to common stockholders per share (in dollars per share) | $ 0.21 | $ 0.21 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash Flows from Operating Activities: | ||
Net income/(loss) | $ (1,364) | $ 59,964 |
Adjustments to reconcile net income/(loss) to net cash provided by operating activities: | ||
Depreciation | 35,797 | 31,515 |
Amortization of debt issuance costs inclusive of settled interest rate swaps | 1,330 | 869 |
Other amortization | 19,779 | 20,111 |
Reversal of general reserve for uncollectible accounts | (400) | 0 |
Stock compensation expense | 1,762 | 2,814 |
Gain on sale of real estate assets | 0 | (50,673) |
Changes in assets and liabilities: | ||
Increase in tenant and straight-line rent receivables | (5,419) | (3,712) |
Increase in prepaid expenses and other assets | (9,007) | (947) |
Decrease in accounts payable and accrued expenses | (6,841) | (19,066) |
Increase/(decrease) in deferred income | 4,761 | (1,026) |
Net cash provided by operating activities | 40,398 | 39,849 |
Cash Flows from Investing Activities: | ||
Capitalized expenditures | (36,184) | (32,565) |
Net sales proceeds from wholly-owned properties | 0 | 143,594 |
Proceeds from notes receivable | 0 | 118,500 |
Deferred lease costs paid | (9,218) | (5,235) |
Net cash (used in)/provided by investing activities | (45,402) | 224,294 |
Cash Flows from Financing Activities: | ||
Debt issuance and other costs paid | (515) | (15) |
Proceeds from debt | 266,603 | 87,000 |
Repayments of debt | (53,000) | (296,000) |
Value of shares withheld for payment of taxes related to employee stock compensation | (1,579) | (3,366) |
Dividends paid | (51,329) | (51,954) |
Net cash provided by/(used in) financing activities | 160,180 | (264,335) |
Net increase/(decrease) in cash, cash equivalents, and restricted cash and escrows | 155,176 | (192) |
Cash, cash equivalents, and restricted cash and escrows, beginning of period | 19,600 | 8,860 |
Cash, cash equivalents, and restricted cash and escrows, end of period | $ 174,776 | $ 8,668 |
Organization
Organization | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Piedmont Office Realty Trust, Inc. (“Piedmont”) (NYSE: PDM) is a Maryland corporation that operates in a manner so as to qualify as a real estate investment trust (“REIT”) for federal income tax purposes and engages in the ownership, management, development, redevelopment, and operation of high-quality, Class A office properties located primarily in major U.S. Sunbelt markets. Piedmont was incorporated in 1997 and commenced operations in 1998. Piedmont conducts business through its wholly-owned subsidiary, Piedmont Operating Partnership, L.P. (“Piedmont OP”), a Delaware limited partnership. Piedmont OP owns properties directly, through wholly-owned subsidiaries, and through various joint ventures which it controls. References to Piedmont herein shall include Piedmont and all of its subsidiaries, including Piedmont OP and its subsidiaries and joint ventures. As of March 31, 2023, Piedmont owned 51 in-service office properties and one redevelopment asset, primarily located in major U.S. Sunbelt office markets. As of March 31, 2023, the in-service office properties comprised approximately 16.7 million square feet (unaudited) and were 86.1% leased. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The consolidated financial statements of Piedmont are prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”), including the instructions to Form 10-Q and Article 10 of Regulation S-X, and do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the statements for the unaudited interim periods presented include all adjustments, which are of a normal and recurring nature, necessary for a fair presentation of the results for such periods. Results for these interim periods are not necessarily indicative of a full year’s results. Piedmont’s consolidated financial statements include the accounts of Piedmont, Piedmont’s wholly-owned subsidiaries, any variable interest entity ("VIE") of which Piedmont or any of its wholly-owned subsidiaries is considered to have the power to direct the activities of the entity and the obligation to absorb losses/right to receive benefits, or any entity in which Piedmont or any of its wholly-owned subsidiaries owns a controlling interest. In determining whether Piedmont or Piedmont OP has a controlling interest, the following factors, among others, are considered: equity ownership, voting rights, protective rights of investors, and participatory rights of investors. For further information, refer to the financial statements and footnotes included in Piedmont’s Annual Report on Form 10-K for the year ended December 31, 2022. All intercompany balances and transactions have been eliminated upon consolidation. Further, Piedmont has formed special purpose entities to acquire and hold real estate. Each special purpose entity is a separate legal entity. Consequently, the assets of these special purpose entities are not available to all creditors of Piedmont. The assets owned by these special purpose entities are being reported on a consolidated basis with Piedmont’s assets for financial reporting purposes only. Use of Estimates The preparation of the accompanying consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the accompanying consolidated financial statements and notes. The most significant of these estimates include the underlying cash flows and holding periods used in assessing impairment, judgements regarding the recoverability of goodwill, and the assessment of the collectability of receivables. While Piedmont has made, what it believes to be, appropriate accounting estimates based on the facts and circumstances available as of the reporting date, actual results could materially differ from those estimates. Income Taxes Piedmont has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended, and has operated as such, beginning with its taxable year ended December 31, 1998. To qualify as a REIT, Piedmont must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of its annual REIT taxable income. As a REIT, Piedmont is generally not subject to federal income taxes, subject to fulfilling, among other things, its taxable income distribution requirement. Piedmont is subject to certain taxes related to the operations of properties in certain locations, as well as operations conducted by its taxable REIT subsidiary which have been provided for in the financial statements. Operating Leases Piedmont recognized the following fixed and variable lease payments, which together comprised rental and tenant reimbursement revenue in the accompanying consolidated statements of operations for the three months ended March 31, 2023 and 2022, respectively, as follows (in thousands): Three Months Ended March 31, March 31, Fixed payments $ 112,560 $ 109,732 Variable payments 24,269 22,180 Total Rental and Tenant Reimbursement Revenue $ 136,829 $ 131,912 Operating leases where Piedmont is the lessee relate primarily to office space in buildings owned by third parties. Piedmont's right of use asset and corresponding lease liability was approximately $0.1 million and $0.2 million as of March 31, 2023 and December 31, 2022, respectively. The right of use asset is recorded as a component of prepaid expenses and other assets, whereas the corresponding liability is presented as a component of accounts payable, accrued expenses, and accrued capital expenditures in the accompanying consolidated balance sheets. For both the three months ended March 31, 2023 and 2022, Piedmont recognized approximately $20,000, respectively, of operating lease costs related to these office space leases. As of March 31, 2023, the remaining lease term of Piedmont's right of use asset is approximately 2 years, and the discount rate is 3.86%. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Debt During the three months ended March 31, 2023, Piedmont entered into a new $215 million, floating-rate, unsecured term loan facility (the “$215 Million Unsecured 2023 Term Loan”). The term of the $215 Million Unsecured 2023 Term Loan is one year, with an option to extend for an additional one year for a final maturity date of January 31, 2025. Piedmont may prepay the loan in whole or in part, at any time without premium or penalty. The stated interest rate spread over Adjusted SOFR can vary from 0.85% to 1.70% based upon the then current credit rating of Piedmont. As of March 31, 2023, the applicable interest rate spread on the loan was 1.05%. The $215 Million Unsecured 2023 Term Loan has certain financial covenants that require, among other things, the maintenance of an unencumbered interest rate coverage ratio of at least 1.75, an unencumbered leverage ratio of at least 1.60, a fixed charge coverage ratio of at least 1.50, a leverage ratio of no more than 0.60, and a secured debt ratio of no more than 0.40. Additionally, during the three months ended March 31, 2023, Piedmont amended the $250 million, floating-rate, unsecured term loan facility (the "$250 Million Unsecured 2018 Term Loan") to convert the reference interest rate from LIBOR to SOFR, along with the various other related amendments necessary to affect this conversion. The following table summarizes the terms of Piedmont’s indebtedness outstanding as of March 31, 2023 and December 31, 2022 (in thousands): Facility (1) Stated Rate Effective Rate (2) Maturity Amount Outstanding as of March 31, 2023 December 31, 2022 Secured (Fixed) $197 Million Fixed Rate Mortgage 4.10 % 10/1/2028 $ 197,000 $ 197,000 Subtotal 197,000 197,000 Unsecured (Variable and Fixed) $350 Million Unsecured Senior Notes due 2023 3.40 % 3.43 % 6/01/2023 350,000 350,000 $215 Million Unsecured 2023 Term Loan SOFR + 1.05% 5.95 % (3) 1/31/2024 (4) 215,000 — $400 Million Unsecured Senior Notes due 2024 4.45 % 4.10 % 3/15/2024 400,000 400,000 $200 Million Unsecured 2022 Term Loan Facility SOFR + 1.00% 5.91 % (3) 12/16/2024 (5) 200,000 200,000 $250 Million Unsecured 2018 Term Loan SOFR + 0.95% 4.54 % 3/31/2025 250,000 250,000 $600 Million Unsecured 2022 Line of Credit SOFR + 0.85% — % (3) 6/30/2026 (6) — — $300 Million Unsecured Senior Notes due 2030 3.15 % 3.90 % 8/15/2030 300,000 300,000 $300 Million Unsecured Senior Notes due 2032 2.75 % 2.78 % 4/1/2032 300,000 300,000 Discounts and unamortized debt issuance costs (14,045) (13,319) Subtotal/Weighted Average (7) 4.14 % $ 2,000,955 $ 1,786,681 Total/Weighted Average (7) 4.13 % $ 2,197,955 $ 1,983,681 (1) All of Piedmont’s outstanding debt as of March 31, 2023 is unsecured and interest-only until maturity, except for the $197 Million Fixed Rate Mortgage, secured by 1180 Peachtree Street, which will begin amortizing principal in October 2023. (2) Effective rate after consideration of settled or in-place interest rate swap agreements and issuance discounts. (3) On a periodic basis, Piedmont may select from multiple interest rate options, including the prime rate and various-length SOFR locks on all or a portion of the principal. All SOFR selections are subject to an additional spread over the selected rate based on Piedmont’s current credit rating. (4) Piedmont may extend the term for an additional year to a final extended maturity date of January 31, 2025 provided Piedmont is not then in default and upon payment of extension fees. (5) Piedmont may extend the term for six (6) Piedmont may extend the term for up to one (7) Weighted average is based on contractual balance of outstanding debt and the stated or effectively fixed interest rates as of March 31, 2023. Piedmont made interest payments on all debt facilities, including interest rate swap cash settlements, of approximately $23.4 million and $15.8 million for the three months ended March 31, 2023 and 2022, respectively. Also, Piedmont capitalized interest of approximately $1.2 million and $1.0 million for the three months ended March 31, 2023 and 2022, respectively. As of March 31, 2023, Piedmont believes it was in compliance with all financial covenants associated with its debt instruments. See Note 5 for a description of Piedmont’s estimated fair value of debt as of March 31, 2023. |
Derivative Instruments
Derivative Instruments | 3 Months Ended |
Mar. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative Instruments Risk Management Objective of Using Derivatives In addition to operational risks which arise in the normal course of business, Piedmont is exposed to economic risks such as interest rate, liquidity, and credit risk. In certain situations, Piedmont has entered into derivative financial instruments, specifically interest rate swap agreements, to manage interest rate risk exposure arising from current or future variable rate debt transactions. Interest rate swap agreements involve the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. Piedmont’s objective in using interest rate derivatives is to add stability to interest expense and to manage its exposure to interest rate movements. Cash Flow Hedges of Interest Rate Risk Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for Piedmont making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. During the three months ended March 31, 2023, Piedmont amended the two remaining LIBOR-designated interest rate swap agreements to change the reference rate from LIBOR to SOFR, in order to match the amended underlying debt terms (see Note 3 above). All of Piedmont's interest rate swap agreements are designated as effective cash flow hedges and are now designated using SOFR. The maximum length of time over which Piedmont is hedging its exposure to the variability in future cash flows for forecasted transactions is 24 months. A detail of Piedmont’s interest rate derivatives outstanding as of March 31, 2023 is as follows: Interest Rate Derivatives: Number of Swap Agreements Associated Debt Instrument Total Notional Amount Effective Date Maturity Date Interest rate swaps 2 $250 Million Unsecured 2018 Term Loan $ 100 3/29/2018 3/31/2025 Interest rate swaps 3 $250 Million Unsecured 2018 Term Loan 75 12/2/2022 3/31/2025 Interest rate swaps 3 $250 Million Unsecured 2018 Term Loan 75 12/12/2022 3/31/2025 Total $ 250 Piedmont presents its interest rate derivatives on its consolidated balance sheets on a gross basis as interest rate swap assets and interest rate swap liabilities. A detail of Piedmont’s interest rate derivatives on a gross and net basis as of March 31, 2023 and December 31, 2022, respectively, is as follows (in thousands): Interest rate swaps classified as: March 31, December 31, Gross derivative assets $ 2,899 $ 4,183 Gross derivative liabilities (394) — Net derivative asset $ 2,505 $ 4,183 The gain/(loss) on Piedmont's interest rate derivatives, including previously settled forward swaps, that was recorded in OCI and the accompanying consolidated statements of operations as a component of interest expense for the three months ended March 31, 2023 and 2022, respectively, is as follows (in thousands): Three Months Ended Interest Rate Swaps in Cash Flow Hedging Relationships March 31, March 31, Amount of gain/(loss) recognized in OCI $ (1,103) $ 3,876 Amount of previously recorded gain/(loss) reclassified from OCI into interest expense $ 484 $ (705) Total amount of interest expense presented in the consolidated statements of operations $ (22,077) $ (13,898) Piedmont estimates that approximately $2.8 million will be reclassified from OCI as a decrease in interest expense over the next twelve months. Additionally, see Note 5 for fair value disclosures of Piedmont's derivative instruments. Credit-risk-related Contingent Features Piedmont has agreements with its derivative counterparties that contain a provision whereby if Piedmont defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then Piedmont could also be declared in default on its derivative obligations. If Piedmont were to breach any of the contractual provisions of the derivative contracts, it could be required to settle its liability obligations under the agreements at their termination value of the estimated fair values plus accrued interest, or approximately $0.4 million as of March 31, 2023 . Additionally, Piedmont has rights of set-off under certain of its derivative agreements related to potential te rmination fees and amounts payable under the agreements, if a termination were to occur. |
Fair Value Measurement of Finan
Fair Value Measurement of Financial Instruments | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement of Financial Instruments | Fair Value Measurement of Financial Instruments Piedmont considers its cash and cash equivalents, tenant receivables, restricted cash and escrows, accounts payable and accrued expenses, interest rate swap agreements, and debt to meet the definition of financial instruments. The following table sets forth the carrying and estimated fair value for each of Piedmont’s financial instruments, as well as its level within the GAAP fair value hierarchy, as of March 31, 2023 and December 31, 2022, respectively (in thousands): March 31, 2023 December 31, 2022 Financial Instrument Carrying Value Estimated Level Within Fair Value Hierarchy Carrying Value Estimated Level Within Fair Value Hierarchy Assets: Cash and cash equivalents (1) $ 170,593 $ 170,593 Level 1 $ 16,536 $ 16,536 Level 1 Tenant receivables, net (1) $ 6,280 $ 6,280 Level 1 $ 4,762 $ 4,762 Level 1 Restricted cash and escrows (1) $ 4,183 $ 4,183 Level 1 $ 3,064 $ 3,064 Level 1 Interest rate swaps $ 2,899 $ 2,899 Level 2 $ 4,183 $ 4,183 Level 2 Liabilities: Accounts payable and accrued expenses (1) $ 20,184 $ 20,184 Level 1 $ 63,225 $ 63,225 Level 1 Interest rate swaps $ 394 $ 394 Level 2 $ — $ — Level 2 Debt, net $ 2,197,955 $ 2,018,146 Level 2 $ 1,983,681 $ 1,825,723 Level 2 (1) For the periods presented, the carrying value of these financial instruments, net of applicable allowance, approximates estimated fair value due to their short-term maturity. Piedmont's debt was carried at book value as of March 31, 2023 and December 31, 2022; however, Piedmont's estimate of its fair value is disclosed in the table above. Piedmont uses widely accepted valuation techniques including discounted cash flow analysis based on the contractual terms of the debt facilities, including the period to maturity of each instrument, and uses observable market-based inputs for similar debt facilities which have transacted recently in the market. Therefore, the estimated fair values determined are considered to be based on significant other observable inputs (Level 2). Scaling adjustments are made to these inputs to make them applicable to the remaining life of Piedmont's outstanding debt. Piedmont has not changed its valuation technique for estimating the fair value of its debt. Piedmont’s interest rate swap agreements presented above, and as further discussed in Note 4 are classified as “Interest rate swaps” in the accompanying consolidated balance sheets and were carried at estimated fair value as of March 31, 2023 and December 31, 2022. The valuation of these derivative instruments was determined using widely accepted valuation techniques including discounted cash flow analysis based on the contractual terms of the derivatives, including the period to maturity of each instrument, and uses observable market-based inputs, including interest rate curves and implied volatilities. Therefore, the estimated fair values determined are considered to be based on significant other observable inputs (Level 2). In addition, Piedmont considered both its own and the respective counterparties’ risk of nonperformance in determining the estimated fair value of its derivative financial instruments by estimating the current and potential future exposure under the derivative financial instruments as of the valuation date. The credit risk of Piedmont and its counterparties was factored into the calculation of the estimated fair value of the interest rate swaps; however, as of March 31, 2023 and December 31, 2022, this credit valuation adjustment did not comprise a material portion of the estimated fair value. Therefore, Piedmont believes that any unobservable inputs used to determine the estimated fair values of its derivative financial instruments are not significant to the fair value measurements in their entirety, and does not consider any of its derivatives to be Level 3 financial instruments. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Commitments Under Existing Lease Agreements As a recurring part of its business, Piedmont is typically required under its executed lease agreements to fund tenant improvements, leasing commissions, and building improvements. In addition, certain agreements contain provisions that require Piedmont to issue corporate or property guarantees to provide funding for capital improvements or other financial obligations. Such commitments are accrued and capitalized as the related expenditures are incurred. In addition to the amounts that Piedmont has already committed to as a part of executed leases, Piedmont also anticipates continuing to incur similar market-based tenant improvement allowances and leasing commissions in conjunction with procuring future leases for its existing portfolio of properties. Both the timing and magnitude of expenditures related to future leasing activity can vary due to a number of factors and are highly dependent on the size of the leased square footage and the competitive market conditions of the particular office market at the time a lease is being negotiated. Contingencies Related to Tenant Audits/Disputes |
Stock Based Compensation
Stock Based Compensation | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock Based Compensation | Stock Based Compensation Annually, the Compensation Committee of Piedmont's Board of Directors has granted deferred stock award units to certain employees at its discretion. Employee awards typically vest ratably over three Certain management employees' long-term equity incentive program is split between the deferred stock award units described above and a multi-year performance share program whereby actual awards are contingent upon Piedmont's total stockholder return ("TSR") performance relative to the TSR of a peer group of office REITs. The target incentives for these certain employees, as well as the peer group to be used for comparative purposes, are predetermined by the board of directors, advised by an outside compensation consultant. The number of shares earned, if any, are determined at the end of the multi-year performance period (or upon termination) and vest immediately. In the event that a participant's employment is terminated prior to the end of the multi-year period, in certain circumstances the participant may be entitled to a pro-rated award based on Piedmont's TSR relative performance as of the termination date. The grant date fair value of the multi-year performance share awards is estimated using the Monte Carlo valuation method and is recognized ratably over the performance period. A rollforward of Piedmont's equity based award activity for the three months ended March 31, 2023 is as follows: Shares Weighted-Average Grant Date Fair Value Unvested and Potential Stock Awards as of December 31, 2022 729,424 $ 19.21 Deferred Stock Awards Granted 865,334 $ 10.03 Performance Stock Awards Granted 424,922 $ 12.37 Change in Estimated Potential Share Awards based on TSR Performance 30,977 $ 21.06 Performance Stock Awards Vested (90,064) $ 25.83 Deferred Stock Awards Vested (265,471) $ 15.34 Deferred Stock Awards Forfeited (138) $ 17.15 Unvested and Potential Stock Awards as of March 31, 2023 1,694,984 $ 13.09 The following table provides additional information regarding stock award activity during the three months ended March 31, 2023 and 2022, respectively (in thousands, except per share amounts): Three Months Ended March 31, March 31, Weighted-Average Grant Date Fair Value per share of Deferred Stock Granted During the Period $ 10.03 $ 16.85 Total Grant Date Fair Value of Deferred Stock Vested During the Period $ 4,073 $ 3,319 Share-based Liability Awards Paid During the Period (1) $ — $ 5,481 (1) Reflects the value of stock earned pursuant to the 2019-21 Performance Share Plan during the three months ended March 31, 2022. A detail of Piedmont’s outstanding stock awards and programs as of March 31, 2023 is as follows: Date of grant Type of Award Net Shares Granted (1) Grant Vesting Schedule Unvested Shares May 3, 2019 Deferred Stock Award 30,958 (2) $ 21.04 Of the shares granted, 20% vested or will vest on July 1, 2020, 2021, 2022, 2023 and 2024 respectively. 19,011 February 17, 2021 Deferred Stock Award 212,936 $ 17.15 Of the shares granted, 25% vested on the date of grant, and 25% vested or will vest on February 17, 2022, 2023, and 2024, respectively. 58,664 February 18, 2021 2021-2023 Performance Share Program — $ 23.04 Shares awarded, if any, will vest immediately upon determination of award in 2024. 96,754 (3) February 10, 2022 Deferred Stock Award 172,923 $ 16.85 Of the shares granted, 25% vested on the date of grant, and 25% vested or will vest on February 10, 2023, 2024, and 2025, respectively. 114,868 February 17, 2022 2022-2024 Performance Share Program — $ 17.77 Shares awarded, if any, will vest immediately upon determination of award in 2025. 174,167 (3) May 11, 2022 Deferred Stock Award-Board of Directors 52,762 $ 13.61 Of the shares granted, 100% will vest on the earlier of the 2023 Annual Meeting or May 11, 2023. 52,762 February 13, 2023 Deferred Stock Award 398,906 $ 10.55 Of the shares granted, 25% vested on the date of grant, and 25% vested or will vest on February 13, 2024, 2025, and 2026, respectively. 334,427 February 23, 2023 2023-2025 Performance Share Program — $ 12.37 Shares awarded, if any, will vest immediately upon determination of award in 2026. 424,922 (3) February 23, 2023 Deferred Stock Award 419,410 $ 9.47 Of the shares granted, 25% will vest on February 23, 2024, 2025, 2026, and 2027 respectively. 419,410 Total 1,694,985 (1) Amounts reflect the total original grant to employees and independent directors, net of shares surrendered upon vesting to satisfy required minimum tax withholding obligations through March 31, 2023. (2) Includes a special, one-time deferred stock award to Piedmont's Chief Executive Officer effective on July 1, 2019, the date of his promotion to the position, which vests in ratable installments over a five year period beginning July 1, 2020. (3) Estimated based on Piedmont's cumulative TSR for the respective performance period through March 31, 2023. Share estimates are subject to change in future periods based upon Piedmont's relative TSR performance compared to its peer group of office REITs. During the three months ended March 31, 2023 and 2022, Piedmont recognized approximately $1.8 million and $2.8 million, respectively, of compensation expense related to stock awards, of which $1.8 million and $1.7 million, respectively, is related to the amortization of unvested and potential stock awards and fair value adjustment for liability awards. During the three months ended March 31, 2023, 203,395 shares (net of shares surrendered upon vesting to satisfy required minimum tax withholding obligations) were issued to employees and independent directors. As of March 31, 2023, approximately $17.7 million of unrecognized compensation cost related to unvested and potential stock awards remained, which Piedmont will record in its consolidated statements of operations over a weighted-average vesting period of approximately two years. |
Supplemental Disclosures for th
Supplemental Disclosures for the Statement of Consolidated Cash Flows | 3 Months Ended |
Mar. 31, 2023 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Disclosures for the Statement of Consolidated Cash Flows | Supplemental Disclosures for the Statement of Consolidated Cash Flows Certain non-cash investing and financing activities for the three months ended March 31, 2023 and 2022 (in thousands) are outlined below: Three Months Ended March 31, March 31, Accrued capital expenditures and deferred lease costs $ 15,709 $ 15,557 Change in accrued dividends $ (25,358) $ (26,048) Accrued deferred financing costs $ 53 $ — The following table provides a reconciliation of cash, cash equivalents, and restricted cash and escrows as presented in the accompanying consolidated statements of cash flows for the three months ended March 31, 2023 and 2022, to the consolidated balance sheets for the respective period (in thousands): 2023 2022 Cash and cash equivalents, beginning of period $ 16,536 $ 7,419 Restricted cash and escrows, beginning of period 3,064 1,441 Total cash, cash equivalents, and restricted cash and escrows as presented in the accompanying consolidated statement of cash flows, beginning of period $ 19,600 $ 8,860 Cash and cash equivalents, end of period $ 170,593 $ 7,211 Restricted cash and escrows, end of period 4,183 1,457 Total cash, cash equivalents, and restricted cash and escrows as presented in the accompanying consolidated statement of cash flows, end of period $ 174,776 $ 8,668 Amounts in restricted cash and escrows typically represent: escrow accounts required for future property repairs; escrow accounts for the payment of real estate taxes as required under certain of Piedmont's debt agreements; earnest money deposited by a buyer to secure the purchase of one of Piedmont's properties; or security or utility deposits held for tenants as a condition of their lease agreement. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share There are no adjustments to “Net income/(loss) applicable to Piedmont” for the diluted earnings per share computations. Net income/(loss) per share-basic is calculated as net income/(loss) available to common stockholders divided by the weighted average number of common shares outstanding during the period. Net income/(loss) per share-diluted is calculated as net income/(loss) available to common stockholders divided by the diluted weighted average number of common shares outstanding during the period, including unvested deferred stock awards. Diluted weighted average number of common shares reflects the potential dilution under the treasury stock method that would occur if the remaining unvested and potential stock awards vested and resulted in additional common shares outstanding. Unvested and potential stock awards which are determined to be anti-dilutive are not included in the calculation of diluted weighted average common shares. For the three months ended March 31, 2023 and 2022, Piedmont calculated and excluded weighted average outstanding anti-dilutive shares of 1,204,123 and 195,837, respectively. The following table reconciles the denominator for the basic and diluted earnings per share computations shown on the consolidated statements of operations for the three months ended March 31, 2023 and 2022, respectively (in thousands): Three Months Ended March 31, 2023 March 31, 2022 Weighted-average common shares – basic 123,550 123,225 Plus: Incremental weighted-average shares from time-vested deferred and performance stock awards — 285 Weighted-average common shares – diluted 123,550 123,510 |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Piedmont's President and Chief Executive Officer has been identified as Piedmont's chief operating decision maker ("CODM"), as defined by GAAP. The CODM evaluates Piedmont's portfolio and assesses the ongoing operations and performance of its properties utilizing the following geographic segments: Atlanta, Dallas, Orlando, Washington, D.C./Northern Virginia, Minneapolis, New York, and Boston. These operating segments are also Piedmont’s reportable segments. As of March 31, 2023, Piedmont also owned two properties in Houston that do not meet the definition of an operating or reportable segment as the CODM does not regularly review these properties for purposes of allocating resources or assessing performance. Further, Piedmont does not maintain a significant presence or anticipate further investment in this market. These two properties are the primary contributors to accrual-based net operating income ("NOI") included in "Other" below. During the periods presented, there have been no material inter segment transactions. The accounting policies of the reportable segments are the same as Piedmont's accounting policies. Accrual-based net operating income ("NOI") by geographic segment is the primary performance measure reviewed by Piedmont's CODM to assess operating performance and consists only of revenues and expenses directly related to real estate rental operations. NOI is calculated by deducting property operating costs from lease revenues and other property related income. NOI reflects property acquisitions and dispositions, occupancy levels, rental rate increases or decreases, and the recoverability of operating expenses. Piedmont's calculation of NOI may not be directly comparable to similarly titled measures calculated by other REITs. Asset value information and capital expenditures by segment are not reported because the CODM does not use these measures to assess performance. The following table presents accrual-based lease revenue and other property related income included in NOI by geographic reportable segment (in thousands): Three Months Ended March 31, 2023 March 31, 2022 Atlanta $ 39,217 $ 29,268 Dallas 28,282 27,085 Orlando 15,414 13,906 Washington, D.C./Northern Virginia 14,899 15,606 Minneapolis 14,961 15,109 New York 13,485 13,875 Boston 10,251 15,365 Total reportable segments 136,509 130,214 Other 5,858 5,935 Total Revenues $ 142,367 $ 136,149 The following table presents NOI by geographic reportable segment (in thousands): Three Months Ended March 31, 2023 March 31, 2022 Atlanta $ 25,186 $ 18,555 Dallas 15,776 16,099 Orlando 9,265 8,499 Washington, D.C./Northern Virginia 8,980 10,047 Minneapolis 8,222 7,914 New York 7,371 7,757 Boston 6,333 10,473 Total reportable segments 81,133 79,344 Other 3,366 3,037 Total NOI $ 84,499 $ 82,381 A reconciliation of Net income/(loss) applicable to Piedmont to NOI is presented below (in thousands): Three Months Ended March 31, 2023 March 31, 2022 Net income/(loss) applicable to Piedmont $ (1,367) $ 59,964 Management fee revenue (1) (293) (362) Depreciation and amortization 57,828 53,767 General and administrative expenses 7,691 7,595 Interest expense 22,077 13,898 Other income (1,440) (1,808) Gain on sale of real estate assets — (50,673) Net income applicable to noncontrolling interests 3 — NOI $ 84,499 $ 82,381 (1) Presented net of related operating expenses incurred to earn such management fee revenue. Such operating expenses are a component of property operating costs in the accompanying consolidated statements of operations. |
Subsequent Event
Subsequent Event | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event Second Quarter Dividend Declaration 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 common share outstanding to stockholders of record as of the close of business on May 26, 2023. Such dividend will be paid on June 16, 2023. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation and Principles of Consolidation The consolidated financial statements of Piedmont are prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”), including the instructions to Form 10-Q and Article 10 of Regulation S-X, and do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the statements for the unaudited interim periods presented include all adjustments, which are of a normal and recurring nature, necessary for a fair presentation of the results for such periods. Results for these interim periods are not necessarily indicative of a full year’s results. |
Principles of Consolidation | All intercompany balances and transactions have been eliminated upon consolidation. Further, Piedmont has formed special purpose entities to acquire and hold real estate. Each special purpose entity is a separate legal entity. Consequently, the assets of these special purpose entities are not available to all creditors of Piedmont. The assets owned by these special purpose entities are being reported on a consolidated basis with Piedmont’s assets for financial reporting purposes only. |
Use of Estimates | Use of Estimates The preparation of the accompanying consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the accompanying consolidated financial statements and notes. The most significant of these estimates include the underlying cash flows and holding periods used in assessing impairment, judgements regarding the recoverability of goodwill, and the assessment of the collectability of receivables. While Piedmont has made, what it believes to be, appropriate accounting estimates based on the facts and circumstances available as of the reporting date, actual results could materially differ from those estimates. |
Income Taxes | Income Taxes Piedmont has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended, and has operated as such, beginning with its taxable year ended December 31, 1998. To qualify as a REIT, Piedmont must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of its annual REIT taxable income. As a REIT, Piedmont is generally not subject to federal income taxes, subject to fulfilling, among other things, its taxable income distribution requirement. Piedmont is subject to certain taxes related to the operations of properties in certain locations, as well as operations conducted by its taxable REIT subsidiary which have been provided for in the financial statements. |
Risk Management Objective of Using Derivatives | Risk Management Objective of Using Derivatives In addition to operational risks which arise in the normal course of business, Piedmont is exposed to economic risks such as interest rate, liquidity, and credit risk. In certain situations, Piedmont has entered into derivative financial instruments, specifically interest rate swap agreements, to manage interest rate risk exposure arising from current or future variable rate debt transactions. Interest rate swap agreements involve the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. Piedmont’s objective in using interest rate derivatives is to add stability to interest expense and to manage its exposure to interest rate movements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Fixed and Variable Lease Revenue | Piedmont recognized the following fixed and variable lease payments, which together comprised rental and tenant reimbursement revenue in the accompanying consolidated statements of operations for the three months ended March 31, 2023 and 2022, respectively, as follows (in thousands): Three Months Ended March 31, March 31, Fixed payments $ 112,560 $ 109,732 Variable payments 24,269 22,180 Total Rental and Tenant Reimbursement Revenue $ 136,829 $ 131,912 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The following table summarizes the terms of Piedmont’s indebtedness outstanding as of March 31, 2023 and December 31, 2022 (in thousands): Facility (1) Stated Rate Effective Rate (2) Maturity Amount Outstanding as of March 31, 2023 December 31, 2022 Secured (Fixed) $197 Million Fixed Rate Mortgage 4.10 % 10/1/2028 $ 197,000 $ 197,000 Subtotal 197,000 197,000 Unsecured (Variable and Fixed) $350 Million Unsecured Senior Notes due 2023 3.40 % 3.43 % 6/01/2023 350,000 350,000 $215 Million Unsecured 2023 Term Loan SOFR + 1.05% 5.95 % (3) 1/31/2024 (4) 215,000 — $400 Million Unsecured Senior Notes due 2024 4.45 % 4.10 % 3/15/2024 400,000 400,000 $200 Million Unsecured 2022 Term Loan Facility SOFR + 1.00% 5.91 % (3) 12/16/2024 (5) 200,000 200,000 $250 Million Unsecured 2018 Term Loan SOFR + 0.95% 4.54 % 3/31/2025 250,000 250,000 $600 Million Unsecured 2022 Line of Credit SOFR + 0.85% — % (3) 6/30/2026 (6) — — $300 Million Unsecured Senior Notes due 2030 3.15 % 3.90 % 8/15/2030 300,000 300,000 $300 Million Unsecured Senior Notes due 2032 2.75 % 2.78 % 4/1/2032 300,000 300,000 Discounts and unamortized debt issuance costs (14,045) (13,319) Subtotal/Weighted Average (7) 4.14 % $ 2,000,955 $ 1,786,681 Total/Weighted Average (7) 4.13 % $ 2,197,955 $ 1,983,681 (1) All of Piedmont’s outstanding debt as of March 31, 2023 is unsecured and interest-only until maturity, except for the $197 Million Fixed Rate Mortgage, secured by 1180 Peachtree Street, which will begin amortizing principal in October 2023. (2) Effective rate after consideration of settled or in-place interest rate swap agreements and issuance discounts. (3) On a periodic basis, Piedmont may select from multiple interest rate options, including the prime rate and various-length SOFR locks on all or a portion of the principal. All SOFR selections are subject to an additional spread over the selected rate based on Piedmont’s current credit rating. (4) Piedmont may extend the term for an additional year to a final extended maturity date of January 31, 2025 provided Piedmont is not then in default and upon payment of extension fees. (5) Piedmont may extend the term for six (6) Piedmont may extend the term for up to one (7) Weighted average is based on contractual balance of outstanding debt and the stated or effectively fixed interest rates as of March 31, 2023. |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Notional Amounts of Outstanding Derivative Positions | A detail of Piedmont’s interest rate derivatives outstanding as of March 31, 2023 is as follows: Interest Rate Derivatives: Number of Swap Agreements Associated Debt Instrument Total Notional Amount Effective Date Maturity Date Interest rate swaps 2 $250 Million Unsecured 2018 Term Loan $ 100 3/29/2018 3/31/2025 Interest rate swaps 3 $250 Million Unsecured 2018 Term Loan 75 12/2/2022 3/31/2025 Interest rate swaps 3 $250 Million Unsecured 2018 Term Loan 75 12/12/2022 3/31/2025 Total $ 250 |
Schedule of Interest Rate Derivatives | A detail of Piedmont’s interest rate derivatives on a gross and net basis as of March 31, 2023 and December 31, 2022, respectively, is as follows (in thousands): Interest rate swaps classified as: March 31, December 31, Gross derivative assets $ 2,899 $ 4,183 Gross derivative liabilities (394) — Net derivative asset $ 2,505 $ 4,183 |
Schedule of Derivative Instruments, Effect on Other Comprehensive Income | The gain/(loss) on Piedmont's interest rate derivatives, including previously settled forward swaps, that was recorded in OCI and the accompanying consolidated statements of operations as a component of interest expense for the three months ended March 31, 2023 and 2022, respectively, is as follows (in thousands): Three Months Ended Interest Rate Swaps in Cash Flow Hedging Relationships March 31, March 31, Amount of gain/(loss) recognized in OCI $ (1,103) $ 3,876 Amount of previously recorded gain/(loss) reclassified from OCI into interest expense $ 484 $ (705) Total amount of interest expense presented in the consolidated statements of operations $ (22,077) $ (13,898) |
Fair Value Measurement of Fin_2
Fair Value Measurement of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, by Balance Sheet Grouping | The following table sets forth the carrying and estimated fair value for each of Piedmont’s financial instruments, as well as its level within the GAAP fair value hierarchy, as of March 31, 2023 and December 31, 2022, respectively (in thousands): March 31, 2023 December 31, 2022 Financial Instrument Carrying Value Estimated Level Within Fair Value Hierarchy Carrying Value Estimated Level Within Fair Value Hierarchy Assets: Cash and cash equivalents (1) $ 170,593 $ 170,593 Level 1 $ 16,536 $ 16,536 Level 1 Tenant receivables, net (1) $ 6,280 $ 6,280 Level 1 $ 4,762 $ 4,762 Level 1 Restricted cash and escrows (1) $ 4,183 $ 4,183 Level 1 $ 3,064 $ 3,064 Level 1 Interest rate swaps $ 2,899 $ 2,899 Level 2 $ 4,183 $ 4,183 Level 2 Liabilities: Accounts payable and accrued expenses (1) $ 20,184 $ 20,184 Level 1 $ 63,225 $ 63,225 Level 1 Interest rate swaps $ 394 $ 394 Level 2 $ — $ — Level 2 Debt, net $ 2,197,955 $ 2,018,146 Level 2 $ 1,983,681 $ 1,825,723 Level 2 (1) For the periods presented, the carrying value of these financial instruments, net of applicable allowance, approximates estimated fair value due to their short-term maturity. |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Nonvested Share Activity | A rollforward of Piedmont's equity based award activity for the three months ended March 31, 2023 is as follows: Shares Weighted-Average Grant Date Fair Value Unvested and Potential Stock Awards as of December 31, 2022 729,424 $ 19.21 Deferred Stock Awards Granted 865,334 $ 10.03 Performance Stock Awards Granted 424,922 $ 12.37 Change in Estimated Potential Share Awards based on TSR Performance 30,977 $ 21.06 Performance Stock Awards Vested (90,064) $ 25.83 Deferred Stock Awards Vested (265,471) $ 15.34 Deferred Stock Awards Forfeited (138) $ 17.15 Unvested and Potential Stock Awards as of March 31, 2023 1,694,984 $ 13.09 The following table provides additional information regarding stock award activity during the three months ended March 31, 2023 and 2022, respectively (in thousands, except per share amounts): Three Months Ended March 31, March 31, Weighted-Average Grant Date Fair Value per share of Deferred Stock Granted During the Period $ 10.03 $ 16.85 Total Grant Date Fair Value of Deferred Stock Vested During the Period $ 4,073 $ 3,319 Share-based Liability Awards Paid During the Period (1) $ — $ 5,481 (1) Reflects the value of stock earned pursuant to the 2019-21 Performance Share Plan during the three months ended March 31, 2022. |
Schedule of Outstanding Employee Stock Awards | A detail of Piedmont’s outstanding stock awards and programs as of March 31, 2023 is as follows: Date of grant Type of Award Net Shares Granted (1) Grant Vesting Schedule Unvested Shares May 3, 2019 Deferred Stock Award 30,958 (2) $ 21.04 Of the shares granted, 20% vested or will vest on July 1, 2020, 2021, 2022, 2023 and 2024 respectively. 19,011 February 17, 2021 Deferred Stock Award 212,936 $ 17.15 Of the shares granted, 25% vested on the date of grant, and 25% vested or will vest on February 17, 2022, 2023, and 2024, respectively. 58,664 February 18, 2021 2021-2023 Performance Share Program — $ 23.04 Shares awarded, if any, will vest immediately upon determination of award in 2024. 96,754 (3) February 10, 2022 Deferred Stock Award 172,923 $ 16.85 Of the shares granted, 25% vested on the date of grant, and 25% vested or will vest on February 10, 2023, 2024, and 2025, respectively. 114,868 February 17, 2022 2022-2024 Performance Share Program — $ 17.77 Shares awarded, if any, will vest immediately upon determination of award in 2025. 174,167 (3) May 11, 2022 Deferred Stock Award-Board of Directors 52,762 $ 13.61 Of the shares granted, 100% will vest on the earlier of the 2023 Annual Meeting or May 11, 2023. 52,762 February 13, 2023 Deferred Stock Award 398,906 $ 10.55 Of the shares granted, 25% vested on the date of grant, and 25% vested or will vest on February 13, 2024, 2025, and 2026, respectively. 334,427 February 23, 2023 2023-2025 Performance Share Program — $ 12.37 Shares awarded, if any, will vest immediately upon determination of award in 2026. 424,922 (3) February 23, 2023 Deferred Stock Award 419,410 $ 9.47 Of the shares granted, 25% will vest on February 23, 2024, 2025, 2026, and 2027 respectively. 419,410 Total 1,694,985 (1) Amounts reflect the total original grant to employees and independent directors, net of shares surrendered upon vesting to satisfy required minimum tax withholding obligations through March 31, 2023. (2) Includes a special, one-time deferred stock award to Piedmont's Chief Executive Officer effective on July 1, 2019, the date of his promotion to the position, which vests in ratable installments over a five year period beginning July 1, 2020. (3) Estimated based on Piedmont's cumulative TSR for the respective performance period through March 31, 2023. Share estimates are subject to change in future periods based upon Piedmont's relative TSR performance compared to its peer group of office REITs. |
Supplemental Disclosures for _2
Supplemental Disclosures for the Statement of Consolidated Cash Flows (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Certain Non-cash Investing and Financing Activities | Certain non-cash investing and financing activities for the three months ended March 31, 2023 and 2022 (in thousands) are outlined below: Three Months Ended March 31, March 31, Accrued capital expenditures and deferred lease costs $ 15,709 $ 15,557 Change in accrued dividends $ (25,358) $ (26,048) Accrued deferred financing costs $ 53 $ — The following table provides a reconciliation of cash, cash equivalents, and restricted cash and escrows as presented in the accompanying consolidated statements of cash flows for the three months ended March 31, 2023 and 2022, to the consolidated balance sheets for the respective period (in thousands): 2023 2022 Cash and cash equivalents, beginning of period $ 16,536 $ 7,419 Restricted cash and escrows, beginning of period 3,064 1,441 Total cash, cash equivalents, and restricted cash and escrows as presented in the accompanying consolidated statement of cash flows, beginning of period $ 19,600 $ 8,860 Cash and cash equivalents, end of period $ 170,593 $ 7,211 Restricted cash and escrows, end of period 4,183 1,457 Total cash, cash equivalents, and restricted cash and escrows as presented in the accompanying consolidated statement of cash flows, end of period $ 174,776 $ 8,668 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Denominator for the Basic and Diluted Earnings Per Share Computations | The following table reconciles the denominator for the basic and diluted earnings per share computations shown on the consolidated statements of operations for the three months ended March 31, 2023 and 2022, respectively (in thousands): Three Months Ended March 31, 2023 March 31, 2022 Weighted-average common shares – basic 123,550 123,225 Plus: Incremental weighted-average shares from time-vested deferred and performance stock awards — 285 Weighted-average common shares – diluted 123,550 123,510 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Revenue and Net Operating Income, by Segment | The following table presents accrual-based lease revenue and other property related income included in NOI by geographic reportable segment (in thousands): Three Months Ended March 31, 2023 March 31, 2022 Atlanta $ 39,217 $ 29,268 Dallas 28,282 27,085 Orlando 15,414 13,906 Washington, D.C./Northern Virginia 14,899 15,606 Minneapolis 14,961 15,109 New York 13,485 13,875 Boston 10,251 15,365 Total reportable segments 136,509 130,214 Other 5,858 5,935 Total Revenues $ 142,367 $ 136,149 The following table presents NOI by geographic reportable segment (in thousands): Three Months Ended March 31, 2023 March 31, 2022 Atlanta $ 25,186 $ 18,555 Dallas 15,776 16,099 Orlando 9,265 8,499 Washington, D.C./Northern Virginia 8,980 10,047 Minneapolis 8,222 7,914 New York 7,371 7,757 Boston 6,333 10,473 Total reportable segments 81,133 79,344 Other 3,366 3,037 Total NOI $ 84,499 $ 82,381 A reconciliation of Net income/(loss) applicable to Piedmont to NOI is presented below (in thousands): Three Months Ended March 31, 2023 March 31, 2022 Net income/(loss) applicable to Piedmont $ (1,367) $ 59,964 Management fee revenue (1) (293) (362) Depreciation and amortization 57,828 53,767 General and administrative expenses 7,691 7,595 Interest expense 22,077 13,898 Other income (1,440) (1,808) Gain on sale of real estate assets — (50,673) Net income applicable to noncontrolling interests 3 — NOI $ 84,499 $ 82,381 (1) Presented net of related operating expenses incurred to earn such management fee revenue. Such operating expenses are a component of property operating costs in the accompanying consolidated statements of operations. |
Organization (Details)
Organization (Details) ft² in Millions | Mar. 31, 2023 ft² property |
Segment Reporting, Other Significant Reconciling Item [Line Items] | |
Number of real estate properties | 51 |
Area of real estate property (in sq ft) | ft² | 16.7 |
Percentage leased | 86.10% |
Redevelopment Asset | |
Segment Reporting, Other Significant Reconciling Item [Line Items] | |
Number of real estate properties | 1 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Schedule of Fixed and Variable Lease Payments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Accounting Policies [Abstract] | ||
Fixed payments | $ 112,560 | $ 109,732 |
Variable payments | 24,269 | 22,180 |
Total Rental and Tenant Reimbursement Revenue | $ 136,829 | $ 131,912 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Accounting Policies [Abstract] | |||
Right of use asset | $ 100 | $ 200 | |
Lease liability | 100 | $ 200 | |
Operating lease costs | $ 20 | $ 20 | |
Operating lease, remaining lease term | 2 years | ||
Discount rate | 3.86% |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Schedule of Debt Instruments [Line Items] | ||
Interest paid | $ 23,400,000 | $ 15,800,000 |
Interest costs capitalized | 1,200,000 | $ 1,000,000 |
$215 Million Unsecured 2023 Term Loan Facility | Unsecured Debt | ||
Schedule of Debt Instruments [Line Items] | ||
Debt instrument, face amount | $ 215,000,000 | |
Debt instrument, term | 1 year | |
Extension period | 1 year | |
Unencumbered interest coverage ratio | 1.75 | |
Unencumbered leverage ratio | 1.60 | |
Fixed charge coverage ratio | 1.50 | |
Maximum leverage ratio | 0.60 | |
Maximum secured debt ratio | 0.40 | |
$215 Million Unsecured 2023 Term Loan Facility | Unsecured Debt | Secured Overnight Financing Rate (SOFR) | ||
Schedule of Debt Instruments [Line Items] | ||
Basis spread on variable rate | 1.05% | |
$215 Million Unsecured 2023 Term Loan Facility | Unsecured Debt | Secured Overnight Financing Rate (SOFR) | Minimum | ||
Schedule of Debt Instruments [Line Items] | ||
Basis spread on variable rate | 0.85% | |
$215 Million Unsecured 2023 Term Loan Facility | Unsecured Debt | Secured Overnight Financing Rate (SOFR) | Maximum | ||
Schedule of Debt Instruments [Line Items] | ||
Basis spread on variable rate | 1.70% | |
$250 Million Unsecured 2018 Term Loan | Unsecured Debt | ||
Schedule of Debt Instruments [Line Items] | ||
Debt instrument, face amount | $ 250,000,000 | |
$250 Million Unsecured 2018 Term Loan | Unsecured Debt | Secured Overnight Financing Rate (SOFR) | ||
Schedule of Debt Instruments [Line Items] | ||
Basis spread on variable rate | 0.95% |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) | 3 Months Ended | |
Mar. 31, 2023 USD ($) extension | Dec. 31, 2022 USD ($) | |
Debt Instrument [Line Items] | ||
Weighted average rate (percent) | 4.13% | |
Discounts and unamortized debt issuance costs | $ (14,045,000) | $ (13,319,000) |
Total/Weighted Average | 2,197,955,000 | 1,983,681,000 |
Secured Debt | ||
Debt Instrument [Line Items] | ||
Total/Weighted Average | 197,000,000 | 197,000,000 |
Secured Debt | $197 Million Fixed Rate Mortgage | ||
Debt Instrument [Line Items] | ||
Debt instrument, face amount | $ 197,000,000 | |
Stated Rate | 4.10% | |
Amount outstanding, gross | $ 197,000,000 | 197,000,000 |
Unsecured Debt | ||
Debt Instrument [Line Items] | ||
Weighted average rate (percent) | 4.14% | |
Discounts and unamortized debt issuance costs | $ (14,045,000) | (13,319,000) |
Total/Weighted Average | 2,000,955,000 | 1,786,681,000 |
Unsecured Debt | $350 Million Unsecured Senior Notes due 2023 | ||
Debt Instrument [Line Items] | ||
Debt instrument, face amount | $ 350,000,000 | |
Stated Rate | 3.40% | |
Effective interest rate (percent) | 3.43% | |
Amount outstanding, gross | $ 350,000,000 | 350,000,000 |
Unsecured Debt | $215 Million Unsecured 2023 Term Loan | ||
Debt Instrument [Line Items] | ||
Debt instrument, face amount | $ 215,000,000 | |
Effective interest rate (percent) | 5.95% | |
Amount outstanding, gross | $ 215,000,000 | 0 |
Unsecured Debt | $215 Million Unsecured 2023 Term Loan | Secured Overnight Financing Rate (SOFR) | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.05% | |
Unsecured Debt | $400 Million Unsecured Senior Notes due 2024 | ||
Debt Instrument [Line Items] | ||
Debt instrument, face amount | $ 400,000,000 | |
Stated Rate | 4.45% | |
Effective interest rate (percent) | 4.10% | |
Amount outstanding, gross | $ 400,000,000 | 400,000,000 |
Unsecured Debt | $200 Million Unsecured 2022 Term Loan Facility | ||
Debt Instrument [Line Items] | ||
Debt instrument, face amount | $ 200,000,000 | |
Effective interest rate (percent) | 5.91% | |
Amount outstanding, gross | $ 200,000,000 | 200,000,000 |
Extension period | 6 months | |
Unsecured Debt | $200 Million Unsecured 2022 Term Loan Facility | Secured Overnight Financing Rate (SOFR) | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1% | |
Unsecured Debt | $250 Million Unsecured 2018 Term Loan | ||
Debt Instrument [Line Items] | ||
Debt instrument, face amount | $ 250,000,000 | |
Effective interest rate (percent) | 4.54% | |
Amount outstanding, gross | $ 250,000,000 | 250,000,000 |
Unsecured Debt | $250 Million Unsecured 2018 Term Loan | Secured Overnight Financing Rate (SOFR) | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 0.95% | |
Unsecured Debt | $600 Million Unsecured 2022 Line of Credit | Line of Credit | ||
Debt Instrument [Line Items] | ||
Debt instrument, face amount | $ 600,000,000 | |
Effective interest rate (percent) | 0% | |
Amount outstanding, gross | $ 0 | 0 |
Unsecured Debt | $600 Million Unsecured 2022 Line of Credit | Secured Overnight Financing Rate (SOFR) | Line of Credit | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 0.85% | |
Unsecured Debt | $300 Million Unsecured Senior Notes due 2030 | ||
Debt Instrument [Line Items] | ||
Debt instrument, face amount | $ 300,000,000 | |
Stated Rate | 3.15% | |
Effective interest rate (percent) | 3.90% | |
Amount outstanding, gross | $ 300,000,000 | 300,000,000 |
Unsecured Debt | $300 Million Unsecured Senior Notes due 2032 | ||
Debt Instrument [Line Items] | ||
Debt instrument, face amount | $ 300,000,000 | |
Stated Rate | 2.75% | |
Effective interest rate (percent) | 2.78% | |
Amount outstanding, gross | $ 300,000,000 | $ 300,000,000 |
Unsecured Debt | Unsecured 500 Million 2018 Line Of Credit | Line of Credit | ||
Debt Instrument [Line Items] | ||
Maximum extension period (in years) | 1 year | |
Number of extension periods | extension | 2 | |
Extension period | 6 months |
Derivative Instruments - Narrat
Derivative Instruments - Narrative (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2023 USD ($) derivative_contract | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Number of swap agreements | derivative_contract | 2 |
Maximum period of extension term | 24 months |
Decrease in interest expense over the next twelve months | $ 2.8 |
Fair value and accrued interest | $ 0.4 |
Derivative Instruments - Schedu
Derivative Instruments - Schedule of Notional Amounts of Outstanding Derivative Positions (Details) | Mar. 31, 2023 USD ($) derivative_contract |
Derivative [Line Items] | |
Number of Swap Agreements | derivative_contract | 2 |
Notional amount of interest rate swap agreements | $ 250,000,000 |
Unsecured Debt | $250 Million Unsecured 2018 Term Loan | |
Derivative [Line Items] | |
Debt instrument, face amount | $ 250,000,000 |
Unsecured Debt | $250 Million Unsecured 2018 Term Loan | Interest Rate Swap, Tranche 1 | |
Derivative [Line Items] | |
Number of Swap Agreements | derivative_contract | 2 |
Notional amount of interest rate swap agreements | $ 100,000,000 |
Unsecured Debt | $250 Million Unsecured 2018 Term Loan | Interest Rate Swap, Tranche 2 | |
Derivative [Line Items] | |
Number of Swap Agreements | derivative_contract | 3 |
Notional amount of interest rate swap agreements | $ 75,000,000 |
Unsecured Debt | $250 Million Unsecured 2018 Term Loan | Interest Rate Swap, Tranche 3 | |
Derivative [Line Items] | |
Number of Swap Agreements | derivative_contract | 3 |
Notional amount of interest rate swap agreements | $ 75,000,000 |
Derivative Instruments - Sche_2
Derivative Instruments - Schedule of Interest Rate Derivatives (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Gross derivative assets | $ 2,899 | $ 4,183 |
Gross derivative liabilities | (394) | 0 |
Net derivative asset | $ 2,505 | $ 4,183 |
Derivative Instruments - Effect
Derivative Instruments - Effect on other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Derivative [Line Items] | ||
Amount of gain/(loss) recognized in OCI | $ (1,103) | $ 3,876 |
Total amount of interest expense presented in the consolidated statements of operations | (22,077) | (13,898) |
Interest rate swaps | ||
Derivative [Line Items] | ||
Amount of gain/(loss) recognized in OCI | (1,103) | 3,876 |
Amount of previously recorded gain/(loss) reclassified from OCI into interest expense | 484 | (705) |
Total amount of interest expense presented in the consolidated statements of operations | $ (22,077) | $ (13,898) |
Fair Value Measurement of Fin_3
Fair Value Measurement of Financial Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Assets: | ||
Interest rate swaps | $ 2,899 | $ 4,183 |
Liabilities: | ||
Interest rate swaps | 394 | 0 |
Carrying Value | ||
Assets: | ||
Cash and cash equivalents | 170,593 | 16,536 |
Restricted cash and escrows | 4,183 | 3,064 |
Liabilities: | ||
Accounts payable and accrued expenses | 20,184 | 63,225 |
Debt, net | 2,197,955 | 1,983,681 |
Carrying Value | Tenant receivables, net of allowance for doubtful accounts | ||
Assets: | ||
Tenant receivables, net | 6,280 | 4,762 |
Carrying Value | Interest rate swaps | ||
Assets: | ||
Interest rate swaps | 2,899 | 4,183 |
Liabilities: | ||
Interest rate swaps | 394 | 0 |
Estimated Fair Value | Level 1 | ||
Assets: | ||
Cash and cash equivalents | 170,593 | 16,536 |
Restricted cash and escrows | 4,183 | 3,064 |
Liabilities: | ||
Accounts payable and accrued expenses | 20,184 | 63,225 |
Estimated Fair Value | Level 1 | Tenant receivables, net of allowance for doubtful accounts | ||
Assets: | ||
Tenant receivables, net | 6,280 | 4,762 |
Estimated Fair Value | Level 2 | ||
Liabilities: | ||
Debt, net | 2,018,146 | 1,825,723 |
Estimated Fair Value | Interest rate swaps | Level 2 | ||
Assets: | ||
Interest rate swaps | 2,899 | 4,183 |
Liabilities: | ||
Interest rate swaps | $ 394 | $ 0 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Collectibility of Tenant Reimbursements | ||
Loss Contingencies [Line Items] | ||
Reductions in reimbursement revenues | $ 0 | $ 0 |
Stock Based Compensation - Narr
Stock Based Compensation - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation expense related to stock awards | $ 1.8 | $ 2.8 |
Amortization of unvested shares | $ 1.8 | $ 1.7 |
Total shares issued to employees, directors, and officers (in shares) | 203,395 | |
Unrecognized compensation cost related to nonvested | $ 17.7 | |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period | 3 years | |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period | 4 years | |
Weighted Average | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation cost related to nonvested, weighted-average vesting period | 2 years | |
Independent Director Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period | 1 year |
Stock Based Compensation - Roll
Stock Based Compensation - Rollforward of Stock Awards (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Shares | ||
Unvested and potential stock awards, end of period (in shares) | 1,694,985 | |
Stock Awards | ||
Shares | ||
Unvested and potential stock awards, beginning of period (in shares) | 729,424 | |
Unvested and potential stock awards, end of period (in shares) | 1,694,984 | |
Weighted-Average Grant Date Fair Value | ||
Unvested and potential stock awards, beginning of period (in dollars per share) | $ 19.21 | |
Unvested and potential stock awards, end of period (in dollars per share) | $ 13.09 | |
Deferred Stock Awards | ||
Shares | ||
Stock awards granted (in shares) | 865,334 | |
Stock awards vested (in shares) | (265,471) | |
Deferred stock awards forfeited (in shares) | (138) | |
Weighted-Average Grant Date Fair Value | ||
Stock awards granted (in dollars per share) | $ 10.03 | $ 16.85 |
Stock awards vested (in dollars per share) | 15.34 | |
Deferred stock awards forfeited (in dollars per share) | $ 17.15 | |
Performance Share Awards | ||
Shares | ||
Stock awards granted (in shares) | 424,922 | |
Change in estimated potential share award based on TSR performance (in shares) | 30,977 | |
Stock awards vested (in shares) | (90,064) | |
Weighted-Average Grant Date Fair Value | ||
Stock awards granted (in dollars per share) | $ 12.37 | |
Change in estimated potential share award based on TSR performance (in dollars per share) | 21.06 | |
Stock awards vested (in dollars per share) | $ 25.83 |
Stock Based Compensation - Addi
Stock Based Compensation - Additional Information Regarding Stock Award Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Deferred Stock Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted-average grant date fair value per share of deferred stock granted during the period (in dollars per share) | $ 10.03 | $ 16.85 |
Total Grant Date Fair Value of Deferred Stock Vested During the Period | $ 4,073 | $ 3,319 |
Performance Share Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted-average grant date fair value per share of deferred stock granted during the period (in dollars per share) | $ 12.37 | |
Share-based liability awards paid during the period | $ 0 | $ 5,481 |
Stock Based Compensation - Outs
Stock Based Compensation - Outstanding Employee Stock Awards (Details) - $ / shares | Feb. 23, 2023 | Feb. 13, 2023 | May 11, 2022 | Feb. 10, 2022 | Feb. 17, 2021 | Jul. 01, 2019 | May 03, 2019 | Mar. 31, 2023 | Feb. 17, 2022 | Feb. 18, 2021 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Unvested shares (in shares) | 1,694,985 | |||||||||
Deferred Stock Awards | Deferred Stock Award, Granted May 3, 2019 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Net shares granted (in shares) | 30,958 | |||||||||
Grant date fair value (in dollars per share) | $ 21.04 | |||||||||
Unvested shares (in shares) | 19,011 | |||||||||
Deferred Stock Awards | Deferred Stock Award, Granted May 3, 2019 | Year 1 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting percentage | 20% | |||||||||
Deferred Stock Awards | Deferred Stock Award, Granted May 3, 2019 | Year 2 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting percentage | 20% | |||||||||
Deferred Stock Awards | Deferred Stock Award, Granted May 3, 2019 | Year 3 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting percentage | 20% | |||||||||
Deferred Stock Awards | Deferred Stock Award, Granted May 3, 2019 | Year 4 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting percentage | 20% | |||||||||
Deferred Stock Awards | Deferred Stock Award, Granted February 17, 2021 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Net shares granted (in shares) | 212,936 | |||||||||
Grant date fair value (in dollars per share) | $ 17.15 | |||||||||
Unvested shares (in shares) | 58,664 | |||||||||
Deferred Stock Awards | Deferred Stock Award, Granted February 17, 2021 | Year 1 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting percentage | 25% | |||||||||
Deferred Stock Awards | Deferred Stock Award, Granted February 17, 2021 | Year 2 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting percentage | 25% | |||||||||
Deferred Stock Awards | Deferred Stock Award, Granted February 17, 2021 | Year 3 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting percentage | 25% | |||||||||
Deferred Stock Awards | Deferred Stock Award, Granted February 17, 2021 | Year 4 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting percentage | 25% | |||||||||
Deferred Stock Awards | Deferred Stock Award, Granted February 10, 2022 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Net shares granted (in shares) | 172,923 | |||||||||
Grant date fair value (in dollars per share) | $ 16.85 | |||||||||
Unvested shares (in shares) | 114,868 | |||||||||
Deferred Stock Awards | Deferred Stock Award, Granted February 10, 2022 | Year 1 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting percentage | 25% | |||||||||
Deferred Stock Awards | Deferred Stock Award, Granted February 10, 2022 | Year 2 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting percentage | 25% | |||||||||
Deferred Stock Awards | Deferred Stock Award, Granted February 10, 2022 | Year 3 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting percentage | 25% | |||||||||
Deferred Stock Awards | Deferred Stock Award, Granted February 10, 2022 | Year 4 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting percentage | 25% | |||||||||
Deferred Stock Awards | Deferred Stock Award-Board of Directors, Granted May 11, 2022 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Net shares granted (in shares) | 52,762 | |||||||||
Grant date fair value (in dollars per share) | $ 13.61 | |||||||||
Unvested shares (in shares) | 52,762 | |||||||||
Deferred Stock Awards | Deferred Stock Award-Board of Directors, Granted May 11, 2022 | Year 1 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting percentage | 100% | |||||||||
Deferred Stock Awards | Deferred Stock Award, Granted February 13, 2023 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Net shares granted (in shares) | 398,906 | |||||||||
Grant date fair value (in dollars per share) | $ 10.55 | |||||||||
Unvested shares (in shares) | 334,427 | |||||||||
Deferred Stock Awards | Deferred Stock Award, Granted February 13, 2023 | Year 1 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting percentage | 25% | |||||||||
Deferred Stock Awards | Deferred Stock Award, Granted February 13, 2023 | Year 2 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting percentage | 25% | |||||||||
Deferred Stock Awards | Deferred Stock Award, Granted February 13, 2023 | Year 3 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting percentage | 25% | |||||||||
Deferred Stock Awards | Deferred Stock Award, Granted February 13, 2023 | Year 4 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting percentage | 25% | |||||||||
Deferred Stock Awards | Deferred Stock Award, Granted February 23, 2023 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Net shares granted (in shares) | 419,410 | |||||||||
Grant date fair value (in dollars per share) | $ 9.47 | |||||||||
Unvested shares (in shares) | 419,410 | |||||||||
Deferred Stock Awards | Deferred Stock Award, Granted February 23, 2023 | Year 1 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting percentage | 25% | |||||||||
Performance Share Awards | Performance Share Program Award, Granted February 18, 2021 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Net shares granted (in shares) | 0 | |||||||||
Grant date fair value (in dollars per share) | $ 23.04 | |||||||||
Unvested shares (in shares) | 96,754 | |||||||||
Performance Share Awards | Performance Share Program Award, Granted February 17, 2022 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Net shares granted (in shares) | 0 | |||||||||
Grant date fair value (in dollars per share) | $ 17.77 | |||||||||
Unvested shares (in shares) | 174,167 | |||||||||
Performance Share Awards | Performance Share Program Award, Granted February 23, 2023 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Net shares granted (in shares) | 0 | |||||||||
Grant date fair value (in dollars per share) | $ 12.37 | |||||||||
Unvested shares (in shares) | 424,922 | |||||||||
Chief Executive Officer Awards | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Award vesting period | 5 years |
Supplemental Disclosures for _3
Supplemental Disclosures for the Statement of Consolidated Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Supplemental Cash Flow Elements [Abstract] | ||||
Accrued capital expenditures and deferred lease costs | $ 15,709 | $ 15,557 | ||
Change in accrued dividends | (25,358) | (26,048) | ||
Accrued deferred financing costs | 53 | 0 | ||
Cash and cash equivalents | 170,593 | 7,211 | $ 16,536 | $ 7,419 |
Restricted cash and escrows | 4,183 | 1,457 | 3,064 | 1,441 |
Total cash, cash equivalents, and restricted cash and escrows as presented in the accompanying consolidated statement of cash flows, beginning of period | $ 174,776 | $ 8,668 | $ 19,600 | $ 8,860 |
Earnings Per Share (Details)
Earnings Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Earnings Per Share [Abstract] | ||
Anti-dilutive shares excluded (in shares) | 1,204,123 | 195,837 |
Weighted-average common shares – basic (in shares) | 123,550,047 | 123,225,145 |
Plus: Incremental weighted-average shares from time-vested deferred and performance stock awards (in shares) | 0 | 285,000 |
Weighted-average common shares – diluted (in shares) | 123,550,047 | 123,509,990 |
Segment Information - Narrative
Segment Information - Narrative (Details) | Mar. 31, 2023 property |
Segment Reporting, Other Significant Reconciling Item [Line Items] | |
Number of real estate properties | 51 |
Other Segments | |
Segment Reporting, Other Significant Reconciling Item [Line Items] | |
Number of real estate properties | 2 |
Other Segments | Houston | |
Segment Reporting, Other Significant Reconciling Item [Line Items] | |
Number of real estate properties | 2 |
Segment Information - Revenue b
Segment Information - Revenue by Geographical Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Revenues | $ 142,367 | $ 136,149 |
Operating Segments | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Revenues | 136,509 | 130,214 |
Other | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Revenues | 5,858 | 5,935 |
Atlanta | Operating Segments | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Revenues | 39,217 | 29,268 |
Dallas | Operating Segments | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Revenues | 28,282 | 27,085 |
Orlando | Operating Segments | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Revenues | 15,414 | 13,906 |
Washington, D.C./Northern Virginia | Operating Segments | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Revenues | 14,899 | 15,606 |
Minneapolis | Operating Segments | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Revenues | 14,961 | 15,109 |
New York | Operating Segments | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Revenues | 13,485 | 13,875 |
Boston | Operating Segments | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Revenues | $ 10,251 | $ 15,365 |
Segment Information - NOI by Ge
Segment Information - NOI by Geographical Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
NOI | $ 84,499 | $ 82,381 |
Operating Segments | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
NOI | 81,133 | 79,344 |
Other | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
NOI | 3,366 | 3,037 |
Atlanta | Operating Segments | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
NOI | 25,186 | 18,555 |
Dallas | Operating Segments | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
NOI | 15,776 | 16,099 |
Orlando | Operating Segments | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
NOI | 9,265 | 8,499 |
Washington, D.C./Northern Virginia | Operating Segments | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
NOI | 8,980 | 10,047 |
Minneapolis | Operating Segments | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
NOI | 8,222 | 7,914 |
New York | Operating Segments | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
NOI | 7,371 | 7,757 |
Boston | Operating Segments | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
NOI | $ 6,333 | $ 10,473 |
Segment Information - Reconcili
Segment Information - Reconciliation of GAAP Net Income to NOI (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Segment Reporting [Abstract] | ||
Net income/(loss) applicable to Piedmont | $ (1,367) | $ 59,964 |
Management fee revenue | (293) | (362) |
Depreciation and amortization | 57,828 | 53,767 |
General and administrative expenses | 7,691 | 7,595 |
Interest expense | 22,077 | 13,898 |
Other income | (1,440) | (1,808) |
Gain on sale of real estate assets | 0 | (50,673) |
Net income applicable to noncontrolling interests | 3 | 0 |
NOI | $ 84,499 | $ 82,381 |
Subsequent Event (Details)
Subsequent Event (Details) | May 01, 2023 $ / shares |
Subsequent Event | |
Subsequent Event [Line Items] | |
Common stock dividends (in dollars per share) | $ 0.21 |