PDM - Earnings call transcript Q3 2020 | Piedmont Office Realty Trust, Inc.

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Operator

[00:00:02] Good day, ladies and gentlemen, and welcome to the Piedmont Office Realty Trust, third quarter Twenty twenty earnings conference call. All lines have been placed on a listen only mode and the floor will be open for your questions and comments following the presentation. At this time, it is my pleasure to turn the call over to your host for today, Mr. Eddie Gilbert. Sir, the floor is yours.

Eddie Guilbert

operator. you, Thank [XX:XX:XX] everyone. morning, Good thank you quarter for third us for twenty earnings joining Twenty today conference Piedmont's We call. supplemental release Last night, X-K our quarter. earnings an Q XX the unaudited and we filed that our includes Form information third for and our available non-cash company's measures earnings your and financial and are information website Securities looking contained our of in FFO release Private Reform and FFO, on to measures the forward Litigation the such in the information is Dotcom financial call or Act statements today's the SAME-STORE, in at XXXX. during as AFFO questions answers the reconciliations Relations prepared as these Section supplemental will contain All this call, DOT defined definitions and the refer under remarks on of this Piedmont Investor to and why certain Core,

of matters our financial president will discuss and We filings. some third made. D. You and covid-XX to well actual they anticipate as speak risk these looking with are our filings. detailed an Officer, any in opening releasing comments risks Brent our [XX:XX:XX] guidance. The forward looking results SEC and results reliance At place Smith, discussion Forward these investment of the provide dividends these operational in looking statements are detail differ income, the on Executive any on discussed pandemic in this the undue operating company's impact not and of quarter therefore and and from may which address those and our we of time, forward revenues looking Chief financial to date uncertainties are looking future forward uncertainties, should and accomplishments. today. and associated on our statements results. those statements subject and everyone activity the and of include related release as discussed to statements statements the press related review Examples as to [XX:XX:XX] statements encourage forward more SEC Piedmont's risks

Brent Smith

increase you thank another joining environment, call. quarter We the the [XX:XX:XX] results Despite in challenging by encouraged was operations, for quarter to let for continues proposals. Piedmont of an today's tours the saw on us were trend objectives. activity strategic in pipeline But into quarter solid and and Good and morning, operating leasing in terms we is leasing be new financial very as me everyone, and uptick continuing clear. third the fourth This our rebuild. leasing

to not are activity We back levels pre of operationally. pandemic

tenants feel over most portfolio of leases to investment our very remaining term and to years. subject six grade that average fortunate are of with the quality We for term continue weighted lease long

total rents to that of collect of substantially date of a modification a XX percent as in whom majority are our the operations entered we've are for of lease XX continue all approximately to related the collections net have disruptions These result experienced quarter. their We businesses with pandemic. and year agreements into third build tenants, retail our

amounts during nine million year back everyone four point this will to and three how be of will XXXX imagine tenants all repay General date perform. reserve the we four this we rent, quarter, now those quarter, cash four be deferred fourth unable to remind are billings of a to tenants when these the of the form XXXX. establish [XX:XX:XX] these be primarily or seven rental in did do year I'll of some related and with in I to As quarter place, of deferrals we or six indicated that Should dollar paid reserve should still most will second last know these we become agreements before have today, million point we months into point As well operations bulk rent to million they agree their which to relief. of of fail? businesses eight are whom the in totaling we of

In will third we that addition accounts, recognize expense quarter, of specific debt to the five during XXXXXX year zero total million, the or receivables bad of to X.X note expense bad general did reserve, bringing availability specific I point the our for about Alar. debt percent

exclude feel two square was third new [XX:XX:XX] leasing related is foot demand, year these first effectively results covid which space completed during hundred tenants, most feet with thousand of the in BioServe. acquired two lease the a data, earlier hundred is have the third While this do new square leasing thousand related seventy to of by one we that and backfilling to fortunate The nine twenty quarter, to over tenant, innovation XXX governor's office, they Delux will With average XX it XX to center. a We center over Cambridge at dollars term in technology our establish believe workforce headquarters the be new Georgia according longer Atlanta a for bodes million jobs to and Highland's our location And investment Corp., in for the investing well innovation Highland. and will over tenancy to a building. XX community. significant the create

DC, the lease, night of our our A during Services. more these of significant a was here seeing the new most lease in place filed was our Washington, regards tenant the that quarter activity detailed strong included Sunbelt where Boston and markets. feet. district's with XXXXX hundred D.C. was are quarterly activity those supplemental during Department markets, Avenue executed in is approximately executed last Virginia currently the list this in information taking from leasing that to we Four area, with quarter square in the Employee leases Washington, for Aside

leaves cash City XX with York these we concerns Looking We the million a based through with pandemic, relatively feet leasing rates five broadstreet. of XX at XXXX, on rents completed encouraged regarding and up than approximately approximately square rental quarter in rent accrual the impact year, rules held over percent percent. concessions. third of the that and for have have other the But increasing rents are steady New [XX:XX:XX] renewables

We have end other expirations until significant the twenty two. of twenty no

are located The to Orange thirty Florida, portfolio exit Avenue the Orlando, and sharing direct asset. a million September are points, on basis, has due our XXX been deal in our are connected foot. pandemic, Orange dollars, per to sometime Jersey XXX hundred located one that or leasing We We hundred to of percentage final on a Piedmont on position corporate Jersey, Same-store sale year Manhattan. basically fifty to our renewal activity as largely which the one the Likewise, lobby from The completed South term to six impacted schedule. and drive to has city downtown shorter Lebanon, term Penn is Or latter and anticipate for completes at hundred flat the what at XG our by connection two Church is million in currently sale Physically directly year, hold foot percent over longer this least slowdown to attributable executed occupancy our New Thousand South we the with pandemic. in the budget several our One Orange still portfolio still hundred approximately XXth, renewal. half a and sale the or transactions, after And dollars point office Bridgewater comparison, to a quarter, during currently declined make New two on square per six frontage. to date hundred Casaroli we of in continue the large economy our market Quarter underway one dollars. in end, refined office hundred to square or acquired the twenty seventy seven projects end lease we've Avenue million us and and but as did located after allowing quarter twenty dispose no Lower slowed our approximately year, two towards the South seventy relatively approximately provides projects and dollars, scale New as Also, foot consisted York expected are of of activity development of for with progress of around in Bridgewater, for well. three a modification capital and acquisition diligently from six out obviously, New square into. Jersey Jersey a actual We twenty acquisitions properties. and approximately Crossing, the remaining to [XX:XX:XX] is third [XX:XX:XX] we any property them Orange and building the the did thousand dollars complete foot agreements be York's. location dispositions Turning transactional entered There build and twenty Avenue believe of working in and all is executing one. modest seven atrium Street. is including the seven square and and building one on programs with to New lease redevelopment not

to Orange of Avenue, on begin Orange a the redevelopment with Now, hundred plans and the Tower. consistent the property PMI two Trophy standard asset reposition to a South immediately

certified specifics quarter at the review first provide Finally, highest during a million lead of amand and We Galeria Texas. office productive bond Office [XX:XX:XX] Piedmont, bond, website. is in for healthy or with, our our take quality providing with on of about own year a environment. the To third environmentally are most we'll that issuance issuance that and the hundred terms tenants I'm the talk that our bond available accomplishments strive quarter funding on conscious, past and dollar we're in of while the earlier moment ESG report properties our But term you'll Towers to issued managing more dedicated acquisition green that completed social this also for we to Bobbit was employees. proceeds Dallas, long end, the the hope this latest this I to impact responsibly workplaces and the moment. corporate environmental, that pleased the the one to governance, use of our the we from three

were You and we is I this vendors. because of also passionately truly will top proxy schools. believe social engage, And including we're proud all serving advisory that see our we that fighting service. we only the And and not by provided Furthermore, to Piedmont communities about sensitive, local environmentally employees we were thing fairly individuals equally we but right add our treating and our together. committed serious for this is do do score to all will

stronger this will walk Bobby highlights for financial Twenty over are turn and the at and guidance quarter the to the better of through point. I Bobby. to call all you We twenty

Robert Bowers

Thanks, our I details. complete the were I'll encourage review earnings discuss you quarter. filed information Fred. release for financial financial and for to more the highlights which supplemental please some night [XX:XX:XX] of last

rate percent six of quarter of or share reflecting third forty twenty, we XXXX, increase third core to diluted reported The the the compared last FFO the well core of activity since year. per across quarter the the For grown rental Twenty three capital a quarter year. recycling over cents have as eight accretive company's cents roll FFO [XX:XX:XX] year earnings ups portfolio, as benefits of of third

than and Brant large orders or items restrictions. income. for revenues, less discussed reduced leasing place, revenues that as slower However, activity year-to-date onset unusual termination due due such income no parking little year our pandemic are, the in we the a in topline growth There originally embedded since however, anticipated, and to shelter our uncertainties, the fees retail revenue settlement is and to of transit, travel

as off revenues four and of type resulting against netted by operating is these are expenses, primarily dollars totaling eight location two buildings offsetting greatly our all recovering, and charges million. as total specific six a reduced that our well daily of costs, remaining operational point Twenty for janitorial reserve slowly write from are of open twenty. dollars but point tenancy increased, fully Partially and items utility throughout million with property lower Although usage it our receivables, the and tenant varies occupancy here, buildings

as third in regions than cash were to for near in in twenty other shelter the some overall the of that tenants defense associated normal approximately buildings tend range. and or in financing higher country, eight have of The earlier our AFFO active thirty still was quarter to the occupancy percent do physical excess while million dividend. flow the tenancy is We government Sunbelt activity. place. services well have occupancy, related have quarter, or today lifted third tens with use are Restrictions located turning others dollars

twenty quarter green to hundred term percent of borrowings we quarter. Brant loan three We million repay place proceeds of this twenty the issue our the million gallery Twenty debt unsecured available line ended mentioned, maturities As bonds dollars five senior three XX hundred one. outstanding are three the third notes dollar fund towers. we on five and put full million dollar dollars, cash did and year one four late use acquisition [XX:XX:XX] the hundred until during the that office under the all in point million They of to no approximately with temporarily credit half twenty earlier capacity year with the twenty the of we

the of today. year As ratio believe term of the for twenty operations. improved twenty and proceeds the a guidance provided ratio of I'd year Twenty the third Twenty X.X net for third we've covid anticipated, of eight of our million The percent XX the impacts the our approximately to is six to or on times, are average covid-XX time, February. Also, like four the thirty we quarter. at twenty down compared even most of At guidance to asset the This near sell impacts end Market this the follows. revisit to use in that our pay year to original Street identified total for dollars of topic June to this of major of to our debt debt. We reflecting approximately gross last debt the quarter impact equates twenty as

While and approximately and we leasing twenty expected, the or dollars. early twenty year. during intelli three overall, company's operating in twenty dollars Likewise, our for is originally the five we income tours tenant net to Also, lowering revenues, to income by dollars approximately proposals uptick is million to the million which an be began estimated year. and fourth third less transient total July, lower [XX:XX:XX] overall, be modestly two than parking leasing will million believe quarters, the occupancy to twenty lowering Twenty new approximately comprises in approximately estimated two for twenty be percent for by retail of lower one experience

ended lower be net our twenty I we lower well to we've million expense as interest as nine receivables. of months tenant that we turn bill six additional to Jersey call At In million three September the the upon original for our four XX one rent two as by line in and for and these of But taken addition, per Twenty dollars Based These dollar expenses five core against acquisition charges some twenty, General against point I'll Offsetting diluted earlier. debt comments. revenue, two bad during the eight approximately estimates receivables a mentioned the a dollar earlier, in twenty are straight eight point end Reserve rental items interest Twenty of discussed activity rates. and or general year. operating time, of by include dollars to million a which the to with Twenty lower Brant four due share Also, lower believe these are be no will expected closing estimate finally, million and low administrative to million range Orlando for reinstating New prevailing expenses dollar dollars for guidance. guidance to disposition over projections. projections, eighty capital we're year this share, XX, in FFO we these is the the that a included for December year. at transactions back cents XX ended And

Brent Smith

future. estate turning positioned tenant are operating office requirements, guidance tenants nonexistent. commercial efficiently the the and CEOs for especially ramifications, real trends are usage more future well of virtually the the twenty being office help and impact sector. this work of focus discussions vast within it [XX:XX:XX] flexibility productivity space twenty to are we continue is head as pandemic. as due of which on created annual towards the occupancy That our to be economy longer culture, schedules. on the evaluate unknown, year, the on Thank these term for and our Notwithstanding withdrew Bobby. you, and against relates the their said, our home densification of I balanced and Instead, April number we In from Piedmont trends of consequences and clients believe uncertainties uncertainties corporate by today, economic the to Still work

quality. a which strong, The and a leases prudent of consider term a is long diversified tenant with company sheet and with has With and have we We expiration. grade little adequate base, majority excellent near-term investment balance appropriate reserves. liquidity

our more not over We also for of the believe are urban I rich four would properties growth laid I rely few transit in and locations strategic future of office serve in investors our into workforce convenient suburban that many a became objectives believe for portfolio within the accelerate to CEO assets a portfolio of ago, high that selected first be mass out year nodes little will do tenants best housing. attractive key locations When a markets. I to targeted located transition Piedmont rich many and on

regards to our our ESG how platform, enhancing leading colleges This We're six instructions pleased Piedmont the highest portfolio the inaugural Scholarship with can Jersey execute be accomplished of our [XX:XX:XX] guidance these how house later could the the satisfaction accomplish our this highest our results. of their the a and acquisition to maintain strategic and questions will the while overall will our of and team to amenities. so our with above earnings. operating Program not environmental will quality Third, they Orlando, our I properties of if objectives, strategic ask to the our Second, Operator. or [XX:XX:XX] for to of goals. operating provide [XX:XX:XX] financial and even through and now And PMA the reinstated percent midst make focusing We completed fall, disclosure practices governance more our on to of and on redevelopment within our in accountability continue commit attempt our twenty submit Twenty proud answer to to maintaining financial while universities pandemic. your earnings to that, do we creatively we to exited the market, I have all now bond properties standards. class best XXXX transition public ongoing finally, black quality to with social With improving repositioning green listeners historically challenge launched appropriate operator bolster and communities, in on has in market, questions. further New global Avenue the experience necessary. offering and Orange risen

Operator

you, is floor gentlemen, Thank [XX:XX:XX] ladies the and questions. open now your for

have ask the you If star a on question, at that best you're this speakerphone, any at press handset one to we up that your time. if question, one provide using telephone quality. Again, do time, while or posing please star questions is for your pick your sound you this keypad a comments

Operator

first Rodgers go We'll with [XX:XX:XX] to Dave Baird.

Dave Rodgers

Maybe with talk you a to the then guys. by you specifically, morning, with Metropolitan with pipeline Market? is talked you I maybe of about of that Hey, asset about dovetail the And [XX:XX:XX] by questions, or type good start I wanted in Can utilization guess. to portfolio improve. couple the beginning

so well. in tenant the and size the pipeline comment, as utilization And the with also average talk about maybe market

Brent Smith

Ok, time Dave. [XX:XX:XX] Appreciate morning, good today. your

pre to little south, indoor covid more in depending on spaces market. and call the but building some it around market, in percent the over question. coming neighborhood little continued that. still say, We'll related a XX very in after say, percent, a XX a government Day, we from But XXX the to levels. occupancy anywhere to depending levels bit seeing, XX but the of XX last I have it's mission-critical standpoint utilization back, months of activity that know, I from buildings particularly on in really is of probably the You north, complex tenants from the and what the percent. bit Labor diminished seeing would some then a we're generalities to also though, XX I think would again And of couple try of are put facilities,

I'd tenancy a as the And say we're the And come a coming back now. you've in smaller instances for market. seeing our back to XX actually well of larger read tenant the some actually utilization, mix, their locations are national XX faster, number we tough Sunbelt. postponed up seeing we're really conclusion. coworking also over seeing to even facilities plus the over tenants headlines, also percent to generally, so achieving draw But it's general particularly at in But

really point. it no And think leasing few across clarity almost when bit data we're one around say, so it the during of the gives pipeline. what little you pandemic, we're seeing to way there's seeing really to to pinpoint comes hopefully kept it nonexistent vary know, we I that deals But board went one a alive. a [XX:XX:XX] I'd you and although

that in really that midsummer. to generally continued And, earnest accelerate to and And to started I'd continue going rebuild, really is rebuild improve. see to that know, it So that you we've call say further. to

I don't second you way, or third fall. meaningful characterize see think it this if want whatever we to a

say to national to larger continue many tenants term business And renewals, that's term say few you when we're hopeful so will try an are terms, we're to a But We're maybe have generally lease do know, know and that capture going Consider momentum shorter rate. to comes very on I out. larger I their opportunity itself that it a longer to extend we well. for would favorable our into seeing, year. fighting and a playing next tenants renewal. a I that this decide we think

And the so start some to moment. larger take seeing also at we're potential those renewals of shape

summer. So but is message continuing what I But level to main very think of low a there is pipeline in hopeful. the I was we're rebuild off the think the

Dave Rodgers

know, I to about, of those talk the corporate pricing, on retreat and disposition right why on color. the discussions Can ultimate the kind that you quarter. the and Jersey any discussions, the was now the of that subsequent assets? kind any asset of of provide turn to color that timing can for sales you to New end wanted the the you in Thank [XX:XX:XX] you

Brent Smith

and was they've of mid-Atlantic our I it think think getting consider think portfolio the and were Northeast of of what [XX:XX:XX] really would assets. core course, up clean we what we knew I consider you began Yes, to And everybody out we the year, when I objective terms I non execution vocal being to get positions. pretty around and less York Philly but wanting goal to around on off been were holdings it vocal of portfolio New We our refine to core. City New just lower continue Manhattan to that to to the it's of a ours always our know, Jersey, in

trade it pandemic, had we And anticipated reach we parties, we than with to in was but really like strategic in zip seven actually eight pretty those the pre transaction we reasonable example all our to over continue felt number a overall. and though, other leasing cap sooner little objective so next out few think itself, that a few business the with of dialog what generating with going pandemic be had really frankly, components achieve us gas basis still then well did maybe I'd pricing cash longer our the the a into with we And would of a And one to example. trades our discuss I see want on cap more this are to parties. transaction you term. rates. with probably level portfolio just to And sharing we high market of we comfortable one of the know, today. relative burnouts a pre I'd call. our the where of implied And And caught of, [XX:XX:XX] a consider number were one went highest inside we point deal had or to one so, trade value on one But of the out good interested to We I a where that's of transactions to is of this think an our dispose we that felt here rate But given point overall, final and also that was say months. peers cap a asset be look it either did and I strategic toughest and you're the parties, think rate thought markets code focus a where forward got and good details were. rate we stock Overall, pricing of but frankly, that And were where out the did the I was transpired. within and where discussions able level actually private basis. to year we the from some to will rest next inside cap play

Dave Rodgers

for Last [XX:XX:XX] pick me just the up they city that somewhere risk what's they on the of York, move New and else?

Brent Smith

the some the would well government recognize talked Obviously, the process process. it past. really deal as play from to space. the year similar elevator with we'll It's issues then feel leasing longer being a it's always tenants, access longer term everything swinging, renewal lease et a year the municipality, user deals end we side and continues about about dealing we've but take talked still a We time and nothing's anticipate to changed do the from shorter in somewhere going did the to what end what and the again with term to go from [XX:XX:XX] lobby expect to as but and bank. like having group to around kind past, risk that that we the very low. term of we slow in tracking XX. And do out with of next the that slow. finalize very and cetera. dedicated It's a state building. We've year. in in We is And needs last Very the it's pretty of unique It a their fits to

Dave Rodgers

thank [XX:XX:XX] you. Ok,

Operator

gentlemen, one [XX:XX:XX] comments. is star one, Thanks any closing additional With no the I'd the it if have holding, for questions reminder, comments. for comment, ladies other to a Smith for Mr. any to like question Star or or or Brant questions back and turn you conference

Brent Smith

virtually NAREIT in prospect today's up excited would leasing everybody Thank few we we'd have joining coming us but to that schedule, a management. anybody [XX:XX:XX] pipeline. on the else a Appreciate is love about weeks. remind that interested call, a with got We've include We're got I we've you. you tight in meeting

have As continue you and look And you great that grow mentioned before, fourth forward I everyone call to think of we they more quarter, our course, discussing time. And then, to thank Halloween that we [XX:XX:XX] and weekend. in to January, read. your for on see a

Operator

thank [XX:XX:XX] today's We participation. that Ladies gentlemen, presentation. you for your and will conclude

time this at and a disconnect may You have day. great

Piedmont Office Realty Trust (PDM) 30 Oct 202020 Q3 Earnings call transcript