PDM

- Piedmont Realty Trust reported third quarter 2026 results with sales of US$144.16 million and revenue of US$151.24 million, while recording a net loss of US$21.02 million or US$0.17 basic and diluted loss per share from continuing operations. - An increase in revenue alongside a wider loss, both in the quarter and over the first nine months, points to rising cost or expense pressure that investors will want to understand within Piedmont Realty Trust's office-focused business model. - This raises the question of how Piedmont Realty Trust's investment narrative is affected by higher revenue paired with a larger quarterly net loss. Spot check how Piedmont Realty Trust's widening loss compares with other real estate plays by scanning our curated 30 resilient stocks with low risk scores. For Piedmont Realty Trust, the big-picture belief is that its Sunbelt focused office portfolio can stay relevant as tenant needs evolve and leases roll over. The latest quarter shows higher revenue but a wider loss, which keeps the near term story grounded in execution on leasing, controlling property level expenses, and managing interest costs rather than headline growth. The most important short term catalyst remains lease commencements and occupancy trends across key markets. The biggest risk is that rising interest expense and capital spending continue to weigh on earnings while demand for traditional offices stays pressured. The third quarter loss and year to date loss both lean into that risk, so the update is material. The third quarter 2026 earnings release is the key disclosure to focus on here. Sales reached US$144.16 million and revenue was US$151.24 million, compared with lower figures a year earlier. However, the business reported a quarterly net loss of US$21.02 million and a higher year to date loss of US$45.04 million. That mix of higher top line and deeper red ink is where the operational story lives right now. For investors, this announcement ties directly into the existing catalysts and risks. The firm is still spending to keep properties competitive and to support leasing in its chosen markets, while interest payments are not well covered by earnings. Execution on leasing, capital recycling, and cost discipline therefore needs to be weighed carefully against the current run rate of losses and funding structure. Piedmont Realty Trust's analyst narrative points to forecast revenue of US$629.0 million and earnings of US$13.1 million by 2029, based on revenue growth of 3.4% per year and an earnings swing of roughly US$93.8 million from current earnings of a US$80.7 million loss. Uncover how Piedmont Realty Trust's fair value indicates a 13% potential upside to its current price that could narrow quickly. Two fair value views from the Simply Wall St Community span roughly US$10.75 to about US$22.03, so private investors are split on where Piedmont Realty Trust should trade. That spread sits beside real business questions around office demand, refinancing costs, and lease-up risk. Opinions are likely to differ widely, so consider exploring several viewpoints before forming your own. Explore another Piedmont Realty Trust fair value estimate, including one that suggests it could be worth just $10.75. Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so consider forming your own view. - A great starting point for your Piedmont Realty Trust research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision. - See our latest analysis for Piedmont Realty Trust. The report includes a comprehensive fundamental analysis summarized in a single visual, the Snowflake, making it easy to evaluate Piedmont Realty Trust's overall financial health at a glance. If the Piedmont Realty Trust story leaves you wanting a wider watchlist, it can help to line it up against other opportunities with different balance sheets, income profiles, and risk levels. The Simply Wall St Screener is a quick way to build that comparison set without starting from a blank page. - If you want resilient businesses where financial risk looks more contained, scan our curated list of 30 resilient stocks with low risk scores to see which stocks meet that brief. - For readers who care most about quality at a reasonable price, start with a focused group of 30 high quality undervalued stocks that pair stronger fundamentals with market skepticism. - Income focused investors can size up potential payers next to Piedmont Realty Trust by reviewing a handpicked set of 7 dividend fortresses built around higher yields and durability. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include PDM. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

This article first appeared on GuruFocus. Release Date: October 27, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. - Record leasing metrics with over 400,000 square feet executed, nearly half from new tenants, and cash/accrual leasing spreads of 26% and 35%, respectively. - Net effective rents after CapEx reached an all-time high of $29 per square foot, up over 30% from the trailing 12-month average, driven by strong rental rate growth. - Same-store NOI grew approximately 8% on a cash basis and 7% on an accrual basis, with a signed but not yet commenced pipeline of $29 million in annual revenue. - Strategic capital recycling: acquired 4,075 Wilson Boulevard at a 10% cap rate with upside to 12%, and under contract to sell Enclave Place for $81.75 million, advancing the exit from Houston. - Improved balance sheet: refinanced high-coupon debt with $230 million exchangeable notes, reducing weighted average cost of debt by over 70 basis points to 4.8% and extending maturity profile with no maturities until late 2028. - Raised and narrowed 2026 core FFO guidance for the third consecutive quarter to $1.55-$1.57 per share, implying over 10% earnings growth. - Dividend remains uncertain: no taxable income forecast for 2027 and likely 2028, and the board has not indicated a dividend is imminent, which may concern income-focused investors. - Leasing capital spend remains elevated at $5.21 per square foot per year, though slightly below the nine-month average, impacting net effective rents. - Some markets like Washington D.C. and Boston are experiencing muted pricing power and slower demand recovery, comprising about 12% of the portfolio. - Potential impact from AI-driven job reductions at large corporations could affect office demand, though management has not yet seen any impact in its portfolio. - Rising interest rates may temper acquisition pace and affect underwriting, with the company pausing some acquisitions and expecting potential pricing impacts on dispositions. - US Bank reduced its space at the downtown Minneapolis asset, creating a vacancy that needs to be backfilled, though activity is reportedly strong. - Warning! GuruFocus has detected 13 Warning Signs with PDM. - Is PDM fairly valued? Test your thesis with our free DCF calculator. Q: Michael Lewis (Truist Securities) asked whether future capital recycling from dispositions into value-add acquisitions would be initially dilutive, or if it could work like this quarter's accretive pairing of the 4,075 Wilson acquisition with the Houston disposition. A: Chris Comey (EVP of Investments) said redeploying disposition proceeds accretively is "not easy, but it can be done," as demonstrated by pairing 4,075 Wilson with the Houston sale. He stressed Piedmont will be "really picky" on quality and risk-adjusted returns, targeting assets with lease-up, short-term roll, or modest repositioning needs. Bidder pools thin out dramatically for deals around $50 million to $75 million, and these are not fully leased, long-WALT assets trading at 6.5% to 7% caps. Brent Smith (CEO) added that 4,075 Wilson is emblematic of the strategy: base building work, amenities and lobby are complete, and Piedmont can drive returns from roughly a 10% cap at 83% leased up to a 12% cap. Q: Michael Lewis (Truist Securities) asked whether recent large-corporate layoffs partly attributed to AI are showing any concerning signs for office-using employment and leasing demand. A: Brent Smith (CEO) answered "the short answer is no." No tenant in active negotiations has pulled back or reduced requirements, and tour activity has not slowed. He noted AI adoption requires both senior and junior team members to collaborate in the office, supporting utilization. Piedmont has posted about 10 straight quarters of expansions exceeding contractions, and its focus on small and medium businesses (full-floor users or less) mitigates exposure to large corporate AI-driven job cuts. He also suggested some large corporations are right-sizing after heavy post-pandemic hiring, andas with pandemic-era space shrinkagesome may need to hire back. Q: Anthony Paolone (JPMorgan) asked about the status of the dividend and Piedmont's ability to keep retaining capital into 2027. A: Sherry Rexrode (CFO) said the dividend is a board decision made in consultation with management. Piedmont is not forecasting taxable income in 2027 and likely not in 2028, a key factor the board will weigh alongside capital needs, which are expected to decline from over $200 million in recent years to a guided $160 million to $180 million next yearallowing greater capacity for distributions. Transaction gains/losses and the deductible expense from repurchasing the 9.25% notes also affect taxable income (neutral this year). She said a dividend does not feel imminent in 2027 and will be evaluated as visibility into the taxable situation improves. Q: Nick Thillman (Baird) asked about the outlook for leasing spreads beyond Dallas and Atlanta and the sustainability of Q3's strong spreads into 2027 and beyond. A: Brent Smith (CEO) said pricing power is broad-based. Dallas and Atlanta are generating 20% to 40% cash roll-ups, with Northern Virginia and Orlando close behind at 15% to 30%. Suburban Minneapoliswhere Piedmont leased about 500,000 square feet in 18 months and pushed rents well into the $30sis producing 10% to 20% renewal roll-ups. DC and Boston are less robust but make up only about 12% of the portfolio combined. Replacement cost rents across most markets are 40% to 45% above current rents with no new supply, supporting a long runway for rate growth. Q: Nick Thillman (Baird) asked about large-block vacancies, the decision to hold back space for scarcity value, and the change in US Bank's lease term and 2Q26 expiration at the downtown Minneapolis asset. A: Brent Smith (CEO) said Piedmont is deliberately keeping larger blocks together, particularly in Atlanta's Central Perimeter, where only two of the roughly 350,000-square-foot blocks remain in the submarket. In Dallas, Epsilon returned about 120,000 square feet, and Piedmont is finishing a light renovation of the lower first floor (~125,000 square feet) with about 500,000 square feet of prospects; Atlanta's two blocks (~150,000 square feet) have about 400,000 square feet of prospects. On US Bank, the tenant slightly reduced its space but remains dedicated to downtown Minneapolis, and Piedmont has good activity behind it. George Wells (Chief Operating Officer) added the building signed about 20,000 square feet this quarter and has several proposals over 100,000 square feet, including renewed interest from Target vendors. Q: Nick Thillman (Baird) asked how the disposition marketing process is progressing and whether the recent rise in interest rates has changed the buyer pool. A: Brent Smith (CEO) said acquisitions would currently be funded with dispositions given the stock price. Enclave Place in Houstona fully leased, long-WALT asset with limited value-creation upsideis expected to close this quarter, followed by the Orlando land parcel around mid-to-late 2027. Piedmont also has a DC district asset and a suburban Boston building actively in the market; receptivity has been positive and buyer pools have not been discouraged by roughly 25 basis points of rate movement, though it is early. Chris Comey (EVP of Investments) clarified Houston is the only disposition projected to close in 2026; the others would be 2027 events. Q: Dylan Bushinski (Green Street) asked whether higher interest rates have changed acquisition underwriting, including hurdle rates or rent growth assumptions in later years. A: Brent Smith (CEO) said debt capital markets directly influence underwriting, and with rates moving around late in the quarter, Piedmont is tempering the pace of potential acquisitions to let the rate and capital-flow environment settle. The company remains engaged on roughly $600 million to $800 million of potential acquisitions and has not changed pricing on the Houston asset. He said no direct pricing impact has been seen yet but expects rates could continue to rise. Q: Dylan Bushinski (Green Street) asked what drove the noticeable Q3 uptick in cash rents and how spreads should trend given strong net effective rent growth. A: Brent Smith (CEO) said the improvement is broad-based, not driven by any single tenant anomaly. Net effective rents rose from $22 to $25 last quarter and $29 this quarter, led by Sunbelt leasing with suburban Minneapolis also contributing. He expects NERs in the mid-to-upper $20s going forward, with portfolio mark-to-market of 10% to 15% overallcloser to For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Piedmont Realty Trust just reported Q3 2026 results and the stock fell 3.9% to US$9.24. That one day drop contrasts with the signal in the numbers. Core funds from operations, the key profit gauge for an office real estate investment trust, now underpins a raised full-year outlook of US$1.55 to US$1.57 per share. The balance sheet changes are a central part of the update. Management refinanced 9.25% debt with 2.875% exchangeable notes, reducing the average borrowing cost and extending maturities, while the market is reacting as if this were a simple earnings miss. Like the refinancing story at Piedmont Realty Trust but want office exposure where debt costs and balance sheets already look cleaner? Take a look at our screener of companies with strong funding profiles and resilient cash generation in the list of solid balance sheet and fundamentals stocks (24 results). - Revenue (Q3 2026 vs. Q3 2025): US$151.236 million vs. US$139.163 million (higher quarterly revenue) - Net Income (Excl. Extra Items, Q3 2026 vs. Q3 2025): loss of US$21.022 million vs. loss of US$13.462 million (wider quarterly loss) - Basic EPS (Q3 2026 vs. Q3 2025): loss of US$0.17 per share vs. loss of US$0.11 per share (larger loss per share) - Funds From Operations (FFO, Q3 2026 vs. Q3 2025): US$47.863 million vs. US$43.485 million (higher quarterly FFO, a key real estate cash flow metric) Tired of scrolling through earnings releases and spreadsheets to piece together what is really going on at Piedmont Realty Trust? Get a clear, visual view of how the balance sheet, debt profile, and refinancing moves fit together in the bigger picture with the full company report for Piedmont Realty Trust. The bullish story says Piedmont Realty Trust can turn upgraded offices in growing Sun Belt markets into stronger economics, not just nicer buildings. "Significant investments in upgrading assets to modern, amenity-rich, energy-efficient buildings have directly contributed to outsized leasing momentum, improving tenant retention and enabling Piedmont to command premium rents, which is expected to further bolster net margins and future earnings as more leases commence." Q3 leasing spreads of roughly 26% on cash and 35% on accrual, record net effective rent near US$29 per square foot, and 8% same store cash NOI growth all line up with that claim. The US$29m signed but not yet commenced rent pipeline also shows those upgrades feeding future FFO, not just occupancy headlines. The bear story argues that concentration, heavy capex, and back weighted income could turn this leasing upswing into a choppy earnings path. "The portfolio remains exposed to large single tenants and government agencies with significant renewal/credit risk (e.g., the pending NYC lease and major tenants in Minneapolis and Dallas); failure to renew these leases or delays in backfilling large vacancies could cause abrupt drops in occupancy, cash flow, and net margins." Q3 results show strong deals in Atlanta, Dallas, Northern Virginia, Orlando, and suburban Minneapolis, plus 10 straight quarters of expansions outpacing contractions. That breadth argues against an immediate hit from any one tenant. Even so, net income stayed in loss territory at US$21.0m and AFFO of about US$30m must still cover ongoing repositioning spend, so concentration and capex risk have not disappeared. That disagreement has a full argument behind it. → Uncover the higher Fair Value this Narrative argues for. Piedmont Realty Trust reports a busy refinancing quarter and a price decline that may appear inconsistent with its earnings power. The real opportunity is spotting stocks that could be undervalued before the market adjusts their pricing. - Company 1 - 34% below our estimate - builds AI superclusters that move demanding workloads onto high capacity cloud infrastructure with multi-cloud resilience. - Company 2 - 46% below our estimate - converts a record backlog of technology heavy data center and modular projects into extended installation and service revenue streams. - Company 3 - 23% below our estimate - supplies power and liquid cooling systems that address heat and water limits inside dense AI data centers. That is three of the list. See every one of the 29 undervalued companies on it → This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include PDM. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

- Interested in Piedmont Realty Trust, Inc.? Here are five stocks we like better. - Strong leasing momentum: Piedmont completed more than 400,000 square feet of leasing in Q3, with cash and accrual spreads of 26% and 35%, respectively. Same-store NOI increased approximately 8% on a cash basis, supported by tenant expansions and a $29 million signed-but-not-commenced pipeline. - Portfolio recycling continues: The company acquired a Class A office building in Arlington, Virginia, for approximately $52 million and agreed to sell Enclave Place in Houston for $81.75 million as it moves toward exiting the Houston market. - Improved balance sheet and outlook: Refinancing reduced Piedmont's weighted average debt cost by more than 70 basis points to 4.8%, while management raised 2026 core FFO guidance to $1.55–$1.57 per share and expects leverage to fall below 7 times net debt to EBITDA by year-end. Piedmont Realty Trust (NYSE:PDM) reported third-quarter results marked by higher leasing volumes, rising rental rates, portfolio recycling activity and a refinancing that reduced its weighted average debt cost. The office real estate investment trust also raised and narrowed its full-year core funds from operations outlook for the third consecutive quarter. Core FFO was $0.39 per diluted share in the third quarter, up $0.04 from the prior-year period, Chief Financial Officer Sherry Rexroad said. The increase was primarily driven by higher rental rates and increased commenced occupancy as leases executed during the past 12 to 18 months began contributing to results. The company generated approximately $30 million of adjusted funds from operations during the quarter. → Can Planet Fitness Get Its Growth Back in Shape? Piedmont completed 43 leases totaling more than 400,000 square feet during the quarter, roughly evenly split between new leases and renewals. Nearly half of total leasing involved new tenants, while the average lease size was about 9,000 square feet and the weighted average lease term was approximately 10 years. President and CEO Brent Smith said tenant demand for the company's amenity-rich office properties remained strong as new construction and office conversions reduced the availability of high-quality space. He said customers were increasingly pursuing expansions and early renewals, including some with expirations as far out as 2030. → Consumer Staples Are Up 12% This Year—These 3 Beverage Stocks Are Leading the Way Cash leasing spreads were 26% during the quarter, while accrual leasing spreads were 35%, representing the company's second-highest quarterly levels. Net effective rent after capital expenditures reached $29 per square foot for the first time, more than 30% above the trailing 12-month average, according to Smith. Chief Operating Officer George Wells said cash rents on space that had been vacant for one year or less increased 26%, while accrual rents rose 35%. Leasing capital expenditures were $5.21 per square foot per year, slightly below the company's nine-month average of $5.44. → Newmont's Record Quarter Shows Why Gold's Floor Is the Real Story Same-store net operating income rose approximately 8% on a cash basis and 7% on an accrual basis in the third quarter. Piedmont also reported a signed-but-not-yet-commenced leasing pipeline equal to about $29 million in annual revenue, or 410 basis points of portfolio occupancy, that is expected to enter results over the next several quarters. Wells said tenant expansions exceeded contractions for the 10th consecutive quarter. Demand has been supported by legal, accounting, insurance, finance, engineering, cybersecurity and defense-related users, management said. The company cited strong activity in Dallas, Atlanta, Northern Virginia, Orlando and suburban Minneapolis, while describing Boston and Washington, D.C., as comparatively less robust markets. During the quarter, Piedmont acquired 4075 Wilson Boulevard, a 186,000-square-foot Class A office building in the Ballston submarket of Arlington, Virginia, for approximately $52 million, or $280 per square foot. The building was 83% leased at acquisition and had a weighted average lease term of five and a half years. Executive Vice President of Investments Chris Kollme said the company sees potential to lease vacant space and reset in-place rents that are roughly 10% below current market rates. Piedmont now controls about 25% of Ballston's 3.2 million-square-foot Class A office inventory, according to management. On the disposition side, Piedmont sold a 10.6-acre undeveloped land parcel in Las Colinas, Texas, for $12 million, generating an approximately $9 million gain. The company also entered into a binding agreement to sell Enclave Place, one of its two remaining Houston assets, for $81.75 million. The transaction is expected to close in the fourth quarter, subject to customary conditions. Management reiterated its intention to exit the Houston market. It also said an Orlando land parcel remains under contract, with a projected late-2027 closing. Piedmont has additional assets in the market, including properties in Washington, D.C., and suburban Boston, though management said any potential sales of those properties would be 2027 events. Piedmont issued $230 million of 2.875% exchangeable senior notes due in 2031 during the quarter and used the proceeds to redeem its remaining 9.25% unsecured senior notes due in 2028. Rexroad said the transaction reduced the company's weighted average cost of debt by more than 70 basis points to 4.8% and extended weighted average remaining debt maturity to 4.3 years. The company has no final debt maturities until October 2028. The company also issued 4.1 million shares through its at-the-market program at an average price of $9.72 per share, while repurchasing about 5.4 million shares at an average price of $9.20 in connection with the exchangeable-note offering. Piedmont ended the quarter with a $152 million balance on its line of credit. It expects to use roughly $80 million of net proceeds from the Enclave Place sale to reduce that balance and return net debt to pre-transaction levels. Management expects net debt-to-EBITDA to fall below 7 times by year-end and to improve further in 2027 as recently signed leases commence. The company raised and narrowed 2026 core FFO guidance to $1.55 to $1.57 per diluted share. The midpoint is $0.06 above Piedmont's original annual outlook and implies growth of more than 10%, Rexroad said. Full-year same-store NOI is expected to increase 7.5% to 8.5% on a cash basis and 5% to 6% on an accrual basis. Management revised projected year-end in-service lease percentage to 87.5% to 88.5%, reflecting property additions, the expected Houston disposition and its strategy of retaining certain larger available spaces for potential premium leasing opportunities. Addressing questions about artificial intelligence and office employment, Smith said Piedmont had not seen tenants reduce requirements, withdraw from lease negotiations or slow touring activity. He said the company's focus on small and midsize users, along with continuing tenant expansion activity, helped mitigate potential effects from workforce reductions at larger corporations. Piedmont Realty Trust, formally known as Piedmont Office Realty Trust, Inc (NYSE: PDM), is a self-managed real estate investment trust that owns, develops, acquires, leases and manages office properties in the United States. The company primarily focuses on high-quality office buildings serving corporate tenants and other organizations. Piedmont's portfolio has historically been concentrated in major office markets across the Sun Belt and eastern United States, including Atlanta, Boston, Dallas, Washington, DC, and other metropolitan areas. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Piedmont Realty Trust Q3 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for October 2026.

Image source: The Motley Fool. Tuesday, Oct. 27, 2026 - Chief Accounting Officer - Laura Moon - President and Chief Executive Officer - Brent Smith - Chief Operating Officer - George Wells - Chief Operating Officer - Alex Valente - EVP of Investments - Christopher A. Kollme - Chief Financial Officer - Sherry L. Rexroad Operator: Good morning, and welcome to Piedmont Realty Trust Inc. Third Quarter 26 Earnings Call. At this time, lines are in a listen only mode and we will open the floor for your-- you can press *1. Should you wish to remove yourself from the queue, press *2. It is now my pleasure to turn the floor over to your host, Laura Moon, chief accounting officer. The floor is now yours. Laura Moon: Thank you, operator, and good morning, everyone. We appreciate you joining us today for Piedmont's third Quarter 26 Earnings Conference Call. Last night, we filed our 10-Q and an 8-K that includes our earnings release, and unaudited supplemental information for the third quarter of 2026. These documents are available for your review on our website at piedmontreit.com under the Investor Relations section. During this call, you will hear from senior officers at Piedmont. Prepared remarks followed by answers to your questions will contain forward looking statements as defined in the Private Securities Litigation Reform Act of 2 thousand. These forward looking statements address matters which are subject to risk and uncertainties, and therefore, results may differ from those we anticipate and discuss today. The risks and uncertainties of these forward looking statements are discussed in our supplemental information as well as our SEC filings. We encourage everyone to review the more detailed discussion related to risk associated with forward looking statements in our SEC filings. Examples of forward looking statements include those related to Piedmont's future revenues and operating income, dividends and financial guidance, future financing, leasing and investment activity, and the impacts of this activity on the company's financial and operational results. You should not place any undue reliance on any of these forward looking statements and these statements are based upon the information and estimates we have reviewed as of the date the statements are made. Also on today's call, representatives of the company may refer to certain non GAAP financial measures such as FFO, core FFO, AFFO, and same store NOI. The definitions and reconciliations of these non GAAP measures are contained in the supplemental financial information which was filed last time. At this time, our president and chief executive officer, Brent Smith, will provide some opening comments regarding third quarter 26 operating results. Brent? Christopher Brent Smith: Thanks, Laura. Good morning, and thank you for joining us today as we review our third quarter 26 results. In addition to Laura, on the line with me this morning are George Wells and Alex Valente, our chief operating officers. Christopher A. Kollme, our EVP of Investments and Sherry L. Rexroad, our chief financial officer. We also have the usual full complement of our management team available to answer your questions. Piedmont had a phenomenal third quarter in operations. Portfolio repositioning, and capital markets activity. First, customer demand for Piedmont PLACES remained robust. Fueling record level leasing metrics. Second, capital recycling activities improve the quality and strategic positioning of the portfolio. And last, a $230 million exchangeable notes offering and subsequent redemption of the company's outstanding 2028 unsecured notes accretive to earnings and cash flow. Diving into the quarter's results, Leasing was strong. We executed over 400 thousand square feet of total leasing with almost half related to new tenants. As we have noted for the past several quarters, quality office space, especially large blocks, is becoming increasingly scarce as historically low construction deliveries and ongoing conversions have reduced total office inventory creating increasingly tight availability for high quality space, and supporting broader landlord pricing power. Piedmont's portfolio is directly benefiting from a scarcity of unique, differentiated, premium office environments. Some trends we are witnessing in our portfolio that emphasize the dwindling availability of high quality office space. First, the number of lease expansions is increasing. Existing customers with renewal dates as far as 2030 are seeking early renewals. And more existing customers are exercising their ROFO rights to block new tenants leasing so they may expand. These are indication that customers are recognizing the current and forecasted conditions the quality office is in high demand, supply is shrinking, and economic terms are shifting to the owner's benefit. Piedmont is taking advantage of these market dynamics. Pushing net effective rents after CapEx to all time highs, reaching $29 a foot for the first time during the third quarter, an increase of more than 30% over the trailing 12 month average. The growth is top line driven. As we continue to achieve higher rental rates across our properties. Piedmont's differentiated assets, achieved cash and accrual leasing spreads for the third quarter of 26%, 35% respectively. The second highest in the company's history and are further testament to the positive rental rate growth embedded in the portfolio. With our current asking rents in our markets still 40% below those required for new construction we think the growth in rental rates will continue for the foreseeable future. As a result of the leasing completed over the last 12 months, and substantially higher rental rates, and the subsequent burn off of the associated free rent, same-store NOI continue to trend positively. Growing by approximately 8% on a cash basis, and 7% on an accrual basis during the third quarter. Today, the signed but yet commenced pipeline equates to approximately $29 million of annual revenue equivalent to 410 basis points of portfolio occupancy that will flow into earnings over the next several quarters. The third quarter was also active for asset recycling with the acquisition of 4.08 thousand Wilson Boulevard and the disposition of a land parcel. 4.08 thousand is an outstanding building. And a strategic addition to the Piedmont portfolio. Please check out the investor relations section of the website for transaction presentation, and Christopher will share additional details in a moment. During the quarter, we also placed 1 of our 2 Houston assets under contract for disposition. With closing expected before year end. Looking ahead, we continue to track a number of acquisition opportunities we would anticipate funding with proceeds from dispositions. Finally, we executed on impact impactful financing activity during the quarter that Sherry will review but the headline is this. We were financed of the last of our high coupon bonds significantly improving our weighted average cost of debt lengthening our remaining debt maturity profile. With no maturities until late 2028. All of this momentum has led us to raise and narrow our annual outlook for the third quarter in a row. With the midpoint now $0.06 ahead of our original 2026 outlook. Sherry will provide the specifics but I did want to note that we have adjusted our projected year end in service lease percentage to a range of 87.5% to 88.5% to reflect introduction of our Meridian project along with our 222 South Orange Avenue building earlier this year, placing both projects back into the in service population by year end. The recent acquisition of the 83% leased 4.08 thousand Wilson Boulevard property and the anticipated sale of the 100% leased Enclave Place asset during the fourth quarter. In addition, we are deliberately preserving our larger blocks of space as we believe are amenity-rich, hospitality-driven Piedmont PLACES are Among The Best Assets In Their Respective Submarkets. and these spaces Will Command A Premium As Availability In Our Markets Continue To Tighten. In Summary, The investment thesis in Piedmont is simple. Demand for our differentiated office products is increasing, while supply is shrinking. Leasing fundamentals continue to improve, and it is quickly becoming a landlord's market. With our portfolio of well located assets designed for the modern workforce, Piedmont is uniquely positioned for success in the marketplace. We are generating among the highest earnings and cash flow growth in the office sector, and trade at a very compelling valuation. With recent net effective rents after CapEx of $29 per square foot, on a stock price that equates to a gross asset value of approximately $220. Per square foot. Furthermore, we currently have an outsized earnings backlog great opportunities for occupancy absorption, and 10-15% of embedded rental rate growth which will continue to drive core FFO higher in the near term. With that, I will hand the call over to George for further details on third quarter operational performance. George? George Wells: Thanks, Brent, and good morning, everyone. We are pleased to see how durable demand for our amenity-rich workplaces has translated into another very productive quarter. We completed 43 leases totaling over 400 thousand square feet with volume evenly split between new business and renewals. The average lease size is approximately 9 thousand square feet, with a weighted average lease term of approximately 10 years. Since the beginning of 2024, our executed leasing activity encompassing both new and renewal transactions has carried a weighted average lease term of approximately 9 years, generating long term reliable future income. For the tenth consecutive quarter, the number of tenant expansions exceeded contractions in our portfolio. Financial, engineering, and law firms are experiencing substantial organic growth. This quarter, we had 7 firms expand by 100 thousand square feet. And as another example of the power of the Piedmont brand to generate additional business across our markets, I am proud to share that an existing customer with offices in 2 separate locations in our portfolio expanded its footprint with us, adding 2 additional offices. 1 in Orlando and the other in Atlanta, a testament to the effectiveness of our place making approach. As Brent noted, tightening market conditions for high quality space are leading to stronger pricing power. Cash rents for space vacant 1 year or less increased by 26% while accrual rents increased by 35%, well above the previous 12 month average of 11%, 22%, respectively. We continue to witness a highly inelastic consumer and a meaningful gap between asking rents and the cost for new construction. Which are unlikely to get completed before the end of the decade. Leasing capital spend for the quarter remained stable at $5.21 per square foot per year. And slightly below our 9 month average of $5.44. Capital continues to be paramount in lease discussions. That said, we are seeing a modest decline in free rent for new and renewal leases. Net effective rent surged by more than 30% from the prior 12 month average to $29.31 per square foot per year. We anticipate maintaining NERs in the mid to upper twenties supported by persistent demand for high quality space and little to no new development in our submarkets. In Dallas, where a quarter of deal volume was completed this quarter, renewals were the dominant theme and a great example of Piedmont's improving pricing power. With few full floors available and a very active pipeline, we increased our asking rates between 20-30% over the past 12 months. Record high rental rates are translating into meaningful rent roll ups of 30% or more. As Brent noted earlier, some of our customers are advocating for early renewals of lease expirations beyond 2028. Recognizing intensifying demand for a rapidly declining supply of larger blocks of space. For instance, at Galleria Towers, a 2-floor customer expiring a few years out elected to renew a today's record high asking rate with virtually no concessions, generating a substantial 43% cash rent roll up. As we head into next year, we expect that early renewal discussions continue to facilitate a reduction in the capital required to retain our existing customers. Atlanta was our most active market by a third of overall volume or 120 thousand square feet and majority of that was new business and landed in each of our vibrant submarkets of central perimeter, Cumberland, and Midtown. Galleria on the Park is leading the Cumberland submarket with asking rates now in the mid fifties per square foot up over 20% from just 12 months ago and comparable to in some cases, exceeding Buckhead rental rates. At 60 Broad, we are finalizing the lease document, and are currently expecting a first quarter execution under the same terms we have shared in the past. Looking ahead, our leasing pipeline is healthy and remains consistent with prior periods and is now approximately 700 thousand square feet either already executed or in the legal stage for the fourth quarter. Outstanding proposals continue to hold steady at approximately 2 million square feet. Assuming a typical quarterly run rate of 175 thousand square feet of new transactions, we are still on track to reach our annual total leasing volume range despite adjusting the New York City renewal to the first quarter of next year. Our hospitality inspired portfolio and elevated service model is unmatched and the formula continues to drive leasing, rent growth, and occupancy gains. I will now turn the call over to Christopher A. Kollme for investment activity. Christopher? Christopher A. Kollme: Thank you, George. As Brent mentioned, during the quarter, we closed on the acquisition of 4.08 thousand Wilson Boulevard, 186 thousand-square-foot class a office building located in the thriving Boston submarket of Arlington, Virginia. for a net purchase price of approximately $52 million or $280 per square foot. 4.08 thousand Wilson is 83% leased, and has 5.5 years of weighted average lease term. The property received a Walk Score of 97. it is surrounded by food and beverage, high density residential and retail, and is a 5-minute walk to the metro. The Boston submarket has emerged as a hub for defense and cybersecurity tenants. And 4.08 thousand Wilson is ideally situated in the heart of the submarket. Just 2 blocks from the defense advanced research Projects Agency and the Office of Naval Research. According to the second quarter JLL report, Boston Class A product is demanding rents 15% higher than the remainder of Northern Virginia, and rental rates in Boston between 2024 and 2026 have grown almost 3 times faster. The class a market in Boston is 3.2 million square feet and Piedmont now controls about 25% of the inventory with no development in sight and several residential conversions expected to remove a little over 1 million square feet of lower quality product. Or 12% of the overall office market. We believe there is imminent upside with the lease up of currently vacant space and resetting in place rents that are approximately 10% below current market rates. On the disposition side, during the third quarter, we closed on the sale of the Royal Lane land parcel that we have discussed for the last several quarters. This was a 10.6 acre undeveloped land parcel located in the Las Colinas submarket of Dallas, Texas. Which we sold for $12 million generating a gain of approximately $9 million. The planned multifamily development will also provide 20 thousand square feet of retail directly adjacent to our Connection Drive assets. Our land parcel in Orlando remains under contract and is projected to be a late 27 close. Finally, during the third quarter, we also entered into a binding contract to sell Enclave Place, 1 of our 2 remaining assets in Houston, Texas, for $81.75 million. We have been clear regarding our intention to exit the Houston market and this is a big step towards that goal. The transaction is subject to customary closing conditions, and is anticipated to close during the fourth quarter of 2026. Although the market has been unsettled over the past few weeks, we continue to actively weigh the disposition of mature and or noncore assets which lack the growth profile of the balance of our portfolio. Our capital allocation priorities remain focused on 1, high return leasing capital. 2, improving balance sheet flexibility and 3, acquisitions that enhance the overall quality of our portfolio are accretive and consistent with our long term growth strategy in the Sunbelt markets. With that, I will pass it over to Sherry to cover our financial results. Sherry L. Rexroad: Thank you, Christopher. While we will be discussing some of this quarter's financial highlights today, please review the earnings release and accompanying supplemental financial information which were filed yesterday for more complete details. Core FFO per diluted share for the third quarter of 26 was $0.39 per diluted share, $0.04 ahead of the third quarter of 2025. Growth was largely driven by higher rental rates and higher commenced occupancy as many of the leases that the team has executed over the last 12 to 18 months have now begun. AFFO generated during the third quarter of 26 was approximately $30 million Turning to the balance sheet. I am very pleased to report that during the third quarter, we issued $230 million of 2.875% exchangeable senior notes due in 2031. Enabling the redemption of all of our remaining 9.25% unsecured senior notes due in 2028. The conversion premium for the exchangeable notes is 37.5%, equating to an initial conversion price of $12.65. Which is above street consensus for our net asset value. I would also note that we also issued under our ATM program during the quarter for the first time. Issuing 4.1 million shares at an average price of $9.72 per share and conversely repurchased approximately 5.4 million shares at an average price of $9.20 per share in conjunction with the exchangeable notes offering. So a lot of moving pieces, but overall, a transformative transaction for the company resulting in a reduction in our overall weighted average cost of debt of over 70 basis points. Which is now 4.8%. As well as an increase in our weighted average remaining maturity to 4.3 years. With no final debt maturities until October 2028. As a result of this transaction, our line balance at the end of the quarter was $152 million However, as Christopher previewed in his remarks, we are currently under contract to sell Enclave Place during the fourth quarter, and anticipate using the approximately $80 million of net proceeds from that transaction to pay down our line of credit balance, bringing our net debt back to pre transaction levels. We continue to project that our net debt to EBITDA ratio will trend below 7x by the end of the year and is projected to continue to improve in 2027 as cash flow associated with recently executed leases continues to increase. As Brent noted in his remarks, for the third quarter in a row, we are increasing and narrowing our 2026 annual core FFO guidance to a range of $1.55 to $1.57 per diluted share. An increase of $0.06 per share at the midpoint when compared to our original 2026 guidance. And equating to an earnings growth rate of over 10%. Same store NOI is projected to increase 7.5 to 8.5% on a cash basis and 5 to 6% on an accrual basis for the year. Please note that consistent with our standard practice, this guidance does not include any speculative acquisitions, dispositions, other than Enclave Place. Or refinancing activity. The most important financial takeaway is that Piedmont's leasing activity is now converting into earnings and cash flow growth. Further, our recent refinancing activity will meaningfully decrease our interest expense in both the fourth quarter of 2026 and in 2027. With that, I will turn the call back over to Brent for closing comments. Christopher Brent Smith: Thank you, George. Christopher and Sherry. As we step back and take a look at the quarter, the message is clear. Piedmont is benefiting from a powerful combination of improving supply demand fundamentals disciplined execution, and a portfolio that is aligned with what office users want today. Leasing demand remains healthy across our markets. Rental rates continue to move higher, Occupancy is growing. And the significant leasing activity we have generated over the last several years is now translating into meaningful earnings and cash flow growth. The office market continues to evolve, but 1 trend has become increasingly apparent. Companies are prioritizing high quality, well located, amenity-rich workplaces to help attract and retain talent. That trend plays directly to Piedmont's strengths. Across our portfolio, we are seeing customers make long term commitments expand their footprint, and engage earlier on renewals as quality space becomes more difficult to find. At the same time, we are thoughtfully enhancing portfolio quality recycling capital into higher growth opportunities and strengthening our balance sheet. These actions are creating greater flexibility, while positioning the company to capture the benefits of a market characterized by limited new supply and improved pricing power. Looking ahead, our priorities remain straightforward. Continue growing occupancy, drive rental rate growth, convert our substantial lease commencement pipeline into cash flow, and further optimize the portfolio. With an embedded earnings backlog, improving balance sheet metrics and strong leasing momentum, we believe Piedmont is well positioned to deliver sustained growth in core FFO cash flow, and shareholder value in the quarters and years ahead. With that, I will now ask the operator to provide our listeners with instructions on how they can submit their questions. Operator? Operator: Thank you. The floor is now open for questions please press *1. We do ask if listening on speakerphone today please pick up your handset while asking your question to provide optimal sound quality. Once again, please press *1 on your phone at this time to join the queue to ask a First question comes from Michael Lewis at Truist Securities. Please go ahead. Michael Lewis: Great. Thank you. My first question maybe for Christopher I thought, and I think a lot of investors thought too that maybe as you sold assets, and redeployed proceeds into value add opportunities, that would be initially dilutive. The activity you announced in the quarter was not. It looks like a higher cap rate on the acquisition right out of the box. As you market other assets, right, the other Houston asset, eventually New York, maybe DC, and you look at the opportunities to reinvest, should we expect that maybe future capital recycling may be dilutive initially, or do you think it kind of works the way that it worked this quarter? Christopher A. Kollme: Hey, Michael. it is Christopher. I will start, and Brent can jump in. I think the question is really can we redeploy disposition proceeds in an accretive manner? it is not easy, but it can be done. And we just showed that, as you pointed out, pairing $40.75 with Houston. I do wanna be clear. We are going to be really picky on what we chase what we try to transact on both on. In terms of quality and risk adjustment returns. We are looking at assets that might have some lease up opportunity that have some short term role. And or may require some modest, repositioning. We proven that we can execute against that profile. I will also say the bidder pools between that when it gets around 50 to $75 million it then. It sends out pretty dramatically. But these are not your core, profiles with long wall and that are fully leased that trade at 6.5 to 7 caps. But again, they are not easy to find. But to be clear, they are out there. We are also not gonna sacrifice on quality. We are only gonna chase opportunities to deliver that differentiated, experience for the tenants and attractive returns for our investors. Christopher Brent Smith: And I would only add and just to echo those points. We think about accretion both on the opportunity going in on day 1, but also where you can drive over the next few years. And I think 4.08 thousand was an outstanding acquisition because, 1, the base building work, amenities, in the lobby have all been completed and 2, we can drive going in at roughly a 10 cap on 83 leased up to a 12. And so I think that is emblematic of how we think about accretion both on the buy, but also on the growth profile. Michael Lewis: Okay. Thanks. And then my second question I could hear the enthusiasm in your voice, Brent, as you described the quarter and of the positioning of Piedmont. I wanted to ask, just in the last few weeks, we have been in this low-hire, low-fire environment. But in the last few weeks, Amex, Barclays, Microsoft, eBay, Amazon, I think Meta and Citi are now. Are laying people off still. All kind of at least partially citing AI as a reason. So, you know, this seemed like a big threat early in the year in the second quarter. Maybe people kind of saw AI driving leasing demand. You know, are you seeing anything on the margin here that is at all concerning regarding kind of office-using employment? and leasing demand? Christopher Brent Smith: Great question, Michael. I think the short answer is no. We continue to have a very good dialogue with tenants that are currently in the lease. No 1 has pulled back from the table or reduced their requirement. Probably even more insightful to what is going on, it would be tour activity. And that has not abated or slowed down at all. And I think when we talk to our customers we continue to see and recognize or they do that their workforce is going to evolve. But the fact of the matter is their team needs to be in an office to collaborate efficiently, This AI technology requires both senior and junior team members to be able to harness it and learn how to use it within their companies. And so that continues to drive office utilization, which is also increasing renewals in demand. I would also point out a couple of statistics within our own portfolio. We have had about 10 straight quarters of expansions that were greater than contractions, and that momentum continues. And then as you pointed out, that list of companies you named were all large corporate users. And as we have talked about, as we have had rolled throughout the portfolio since the pandemic, we focused a lot more on small and medium businesses. And we have continued to see strong demand from those call it, full floor users or less. And we think AI has less of an impact on those small and medium enterprises, which have been more of our focal point. I would also point out that a lot of these larger corporations have hired an immense number of workers since the pandemic, And so part of this, I do believe, is rightsizing their own organizations and sometimes hiring. Hiding under the cover of AI But obviously, is going to change the profile of workers particularly for some of these larger companies. And I would also say that we have seen, just like in the pandemic, a lot of the design of space that was done in 2022 and early 2023 shrank too much and was an overreaction. We are seeing those things expand So I would caution, there is a potential for a very similar pattern here is that companies are shrinking too much and may need to hire back as time proceeds. But I think, overall, we feel like the portfolio is well mitigated from the impact potentially of AI job reductions in large corporates, and we are seeing no impact again in our pipeline, tour activities, or anything else from a discussion with our tenant base. All right. Thank you. Look forward to seeing you soon. Likewise. Operator: Next question from Anthony Paolone with JPMorgan. Please go ahead. Anthony Paolone: Yes. Thanks. Good morning. And just to follow-up on that line of questioning, can you maybe go through your major markets and talk about the nature of the demand in your pipeline, the types of industries it represents and just anything else that you are seeing trend wise among different groups of tenants? George Wells: Good morning, Tony. This is George. I will take that I was. it is it is really gratifying to see that overall demand continues at a pretty strong pace even after that record year of new leasing activity. In 2025. And you know, the characteristics of that demand continues to come pretty much the same legal accounting, insurance, finance. We are seeing a little bit more technology companies, cybersecurity, I would say, you know, the defense industry has been a bright spot for us. And just to give you an indication, if you look at our NOVA portfolio in the past few years, I think 2023, I think we did 25 thousand square feet and doubled in 2024, doubled again in 2025, and we are on track to even exceed in 2026 what we have done in 2020. 2025. So we are we are pretty excited about that. I would say you know, Brent mentioned expansions. Even to this day, we are seeing deal activity in the legal stage that are coming from the same characteristics, legal, accounting, finance, it is really widespread across the board and where-- but in terms of what people are looking for in terms of expansion. And so we are pretty excited about that. I will highlight, though, that Atlanta our central perimeter submarket where we have broad comp and Fiserv, which is expiring in the third quarter of next year. Really pleased with how that particular submarket is accelerating in terms of its overall fundamentals. Right? About a year ago, you had about 8 spaces over 100 thousand square feet that were available. Now that shrunk down to 2. 2 or 3. And on top of that, 10% of the market is in some sort of conversion. Right? So you reduce. to reduce some supply, but being converted from office to resi, So that is really. That combination has really given us some real good confidence in terms of backfilling that space. In fact, we probably got enough proposals today that is double the amount of vacancy that we will see in that particular submarket, and so we are pretty confident about addressing that. Christopher Brent Smith: I would just add to that. We continue to see the proposal pipeline is around 2 million square foot mark, which is historically what it is been in the quarters. Past. And robust demand in suburban Minneapolis. You asked to look at the markets. Dallas is strong across the entire market. We are very pleased at almost 98% leased at Galleria, but still continue to see immense demand, and it is picking up in Midtown and the Perimeter, as George noted. Northern Virginia and Boston very robust activity. Think the district is probably 1 of our more muted submarkets overall, but it is starting to pick up particularly at the high end of the market. And then Orlando continues to be strong, both downtown and in the suburbs from engineering, accounting, and financial services firms. And I would say probably Boston is a little bit of a laggard, and that is just not as robust. it is a technology driven market. it is starting to come back. Thankfully, we do not have any role there really near term. And just a little bit of vacancy that we can address. Here as the market picks up. Anthony Paolone: Okay. Thanks for all of that. And then my second question just relates to where things stand on the dividend and your ability perhaps to keep retaining capital as we start to look into 2027? Sherry L. Rexroad: Tony, it is Sherry. And, you know, that is a call that our board will make after consultation with us, and, you know, we will review all of the kind of factors with them. Importantly, you know, our. What is our, you know, taxable income? At this point, we are not forecasting a taxable income in 27. And likely not in 2028. So that is 1 factor the board will take into consideration along with what our capital needs which should be going down going into next year. You know? We have had this year and the prior couple years up over $200 million. And we have been guiding people to $160 million to $180 million for a year. So that. As that capital need decreases, it will allow for greater, you know, capital for distribution. The other factor in our net tax income that you have to take into consideration are transactions. Some of which will have some gains, some will have losses. For this year, we think it is a neutral impact. You also have to factor in the expense to repurchase the 9 and a quarter bond. That is deductible against taxable income, and so that reduced the burden for this year. So all of that said, I think as you as you look forward, you know, those are factors we will be providing the board from our January and February board meeting. That does not make me feel like a dividend is imminent in 2027 and will be evaluated as we go through 2020 gaining greater visibility into what our taxable situation will be. Anthony Paolone: Okay. Great. Thank you for that. Operator: Next question comes from Nicholas Thillman with Baird. Nick Tillman: Brent and George, wanted to comment a little bit or get your thoughts on the outlook. Obviously, you finally are starting to see what you guys have been mentioning of limited quality blocks, ability to push rate. Just curious on if there is any other markets? It seems as though Dallas and Atlanta were really the standout on these metrics. And driving a lot of performance, but comments on the broader portfolio as we look for 2027 and beyond on the ability to push rate, how you feel at those spreads, and the sustainability of what we saw in third quarter persisting going forward. Christopher Brent Smith: Thanks for joining us this morning, Nicholas. it is Brent. Great question. You know, I characterize you mentioned Dallas and Atlanta as being the drivers. It is really across a number of markets in our portfolio, beyond Dallas and Atlanta, which are standout. I know our large projects, the Galleria at both cities as well as our midtown product in Atlanta generating 20% to 40% cash roll ups. But Northern Virginia and Orlando are just right behind that. And we are seeing anywhere from, call it, 15 to 30% roll ups in those 2 markets and submarkets. And Suburban Minneapolis, also another sub market where we are a dominant landlord. We leased about 500 thousand square feet there in the last 18 months, and we have pushed rental rates well into the $30 debt really created our own segment of the market. And we continue to generate nice roll ups, we call it, in the 10% to 20% range for renewals in that. Market. I would say some markets where we are not seeing as much robust pricing power would be, as we noted, D. C and Boston. Again, those 2 make up a call it, maybe about 12% of the portfolio amongst the 2 of them. Combined. So not a large portion of the portfolio is just not experiencing this robust growth. And what is exciting for us is that each of those markets, Suburban Minneapolis, Orlando, and Northern Virginia, Atlanta, Dallas, to some degree, all have replacement cost rents that are 45% above the rents we are charging. So we see a long runway and no new supply. Think the only place in our portfolio where we are seeing supply would be Uptown Dallas, and they are asking almost a $100 net rent. In that location for that product. So, really, good backdrop. It sets up for us continuing to be able to meaningfully push rate for the foreseeable future, as I noted in my prepared remarks. So it is really across the portfolio. Again, outside of maybe Boston and DC, the district. Nick Tillman: Oh, that. that is really helpful. And then as we look toward 2027, you guys commented a little bit about holding back, maybe on leasing some space some larger blocks given the scarcity effect, but just curious on some of the larger vacancies you have pending overall activity and coverage on that space. Then it also looked like US Bank their lease term shrunk a little bit, and they. Expiration for 2 q 26 increased. So maybe just reconciling the changes Is there a termination with their downtown Minneapolis assets and associated activity with that as well. Christopher Brent Smith: So as you noted, we did say in 2027, we do have a number of. For looking ahead to 2027, a number of larger blocks that are in the market right now, particularly here in the central perimeter in Atlanta, George did note work now have, call it, 2 out of the 3 50 thousand square foot blocks that remain in the submarket. With a lot of corporate activity. So we think that there is rationale and good reason continue to keep that block together, and we have good activity. Our other larger block is in Dallas as we noted, Epsilon renewed for about half their space. So they did give back about 120 thousand square feet. We had some prospects at the beginning of the year. It did not quite pan out. We put the lower 1st Floor space into a light renovation. it is wrapping up. And for that, about 125 thousand square feet, we currently have about 500 thousand of prospects. In Atlanta, we are currently where we have those 2 blocks for about 150. We have got about 400 thousand square feet of prospects. And really the only other considerably large block that we have in the portfolio, we have a little bit of space in New York in the tower at 60 Broad. However, with the planned monetization of that event at some point, probably does not make sense to be doing a large lease other than New York City, again, which we have noted we will wrap up. In the first quarter. The. Your question, then, specifically, I think that covers the larger blocks in this in the portfolio. The other question was in US banks, change in their metrics. And so as you kind of alluded to, in Downtown Minneapolis, when we did the lease with U. S. Bank in the middle of the pandemic, they did not know exactly what their long term size needs would be. They have reduced their space at the building slightly But we continue to see A, they are dedicated to Downtown Minneapolis and the building and B, some good prospects given that is the best asset in the submarket. So they have rightsized, but we have very good activity behind that. George Wells: Yeah. I mean, if I could add a little bit to that. I mean, that building, because, you know, you have got 7 and 8 kind of retail f and b. It uses directly in our building as really great in that right kind of environment that users want today. So it is very activated. You have got. We did sign a couple of deals this quarter. In that tower for about 20 thousand square feet, and our pipeline actually looks pretty good. We have got several proposals for over a 100 thousand square feet that is out there today. We are seeing that from a wide range of groups, and legal ought to be in this kind of environment. We are seeing insurance, accounting, real estate. And we are even seeing the target vendors come back to the market because we sit adjacent to Target headquarters and we are really pleased to see that come back to the market. So we are we are feeling pretty good about the near term. Nick Tillman: No. I appreciate all that commentary. Maybe just the last 1 rounding things out on the disposition side. It seems as though acquisitions are mostly going to be funded via dispositions and likely to be what you guys can sell before you can hit the buy button. But I know you guys have a couple of assets within the market. I guess, how has reception been on the early process of marketing those assets? And then with the recent rise in interest rates, has there been any change in the buyer pool or bidders that you have been seeing on those prospective assets? And anything that is worth highlighting over the last couple of months? Just as you have been marketing those assets in particular. Christopher Brent Smith: Yeah. Nicholas, I think it is a fair characterization To say that acquisitions would be right now funded with dispositions given where our stock currently trades. And as we think about dispositions, we have always kind of put the framework out that we always wanna call the top 10%, the bottom 10% of the portfolio. The top 10% being you know, very mature long walled assets, and the bottom 10% just being those that are under performers or just long term, we do not have the conviction to push rates meaningfully higher. As you know, Houston, our building there, Enclave Place, fits kind of fully baked long term walls. You are gonna not be able to create more value, and we do expect that to close this quarter. Behind that, we do have, as I think we have noted in the past, the land parcel that is under contract in Orlando. that is probably likely to be completed towards the middle to end of next year. Call it maybe third quarter And then we do have a couple of buildings in the market today for sale. cannot get into too much specifics because they are active transactions, but I would say for the assets we are in the market with the district in DC, and then a building in the suburban Boston market. Receptivity has continued to be very positive. It is still early in that process. But I think we have not seen our buyer pools be discouraged with a slight movement in rates. I think they are up maybe 25 bps since we started the process. But it is early. We have not fully taken round 1 bids. So it is a little tough to say if it is impacted it, but tours and debt availability are still there. it is just debt pricing has maybe gone up a little bit. And I would point out that some of our buyers are unlevered buyers or will look to finance the asset after close. It is not a financing contingency. Included in that similar to what we had in Houston. So with that, I think that we will take those proceeds. And as we talked about redeploy those into strategic acquisitions that fit within our submarkets. We would not add a dot on the map until we take 1 off. And we continue to see very interesting opportunities to rotate that capital from dispositions accretively both in opportunities near term but growth. As we think about improving the growth trajectory of the overall portfolio. Sherry L. Rexroad: And Nick, just to clarify, the Houston disposition is the only 1 we project to close in 2026. The other assets we have out in the market to the extent they trade, and as Brent mentioned, it is early. Those are 27 events. Nick Tillman: Great. that is it for me. I appreciate the time, guys. Christopher Brent Smith: Thank you. Thank you. Operator: Ladies and gentlemen, as a reminder, if you have a question, Next question from Dylan Burzinski with Green Street. Please go ahead. Dylan Burzinski: Good morning, guys. Thanks for taking the question. And appreciate your comments, Brent, on sort of any or not noticing yet any impact on the higher rate environment on your disposition processes that you have in the market. But I guess maybe another way to ask it, as you guys are out there underwriting acquisitions, has your underwriting changed at all from higher rates? As it relates to maybe a higher hurdle rate? Any sort of potential impact as you think about rent growth in years 2, 3, and 4 into the future? Just any thoughts there would be helpful. Christopher Brent Smith: Great question, and thanks for joining us today, Dylan. The underwriting, certainly, the debt capital markets have a direct influence on underwriting, whether you are public or private, whether you are asset level or corporate level debt, a movement in interest rates is going to have some impact particularly if it remains elevated longer term. Think as we have obviously had a lot of transactional activity this quarter, And particularly towards the end of the quarter with rates moving around, we recognized that let's temper the speed at which we are moving on some of these potential acquisitions. Let's wait to see what the interest rate environment and really capital and fund flows really have will dictate pricing. And so we have I would not say put the pause button, but I would characterize it as, let's let the interest rate market mature and work things out a little bit. That said, we continue to stay very engaged on probably anywhere from call it, $600 million to $800 million of potential acquisitions. As we have noted, we have got these dispositions in the marketplace. So we are keeping a close eye on it. We have not and we are not in a price change on our Houston asset, which has been in the market during that time period. So we continue to remain optimistic that our other dispositions that are active right now will have a similar outcome. But at this point, I would say we have not seen direct impact pricing, but I would expect it if rates continue to increase from here. Great. Thanks, Brent. Dylan Burzinski: And, obviously, maybe switching gears here. You know, cash realization has been very strong year to date. A noticeable uptick. In Q3 versus where the first half was. So as we sort of think about 2027, the next few years, I mean, was there anything, I guess, in a specific lease in Q3 that drove that higher? And I guess, how should we be thinking about how that trends given the strong net effective rent growth that you guys have seen Great point, Dylan. Christopher Brent Smith: And I would say we continue to tell the story since the beginning of this year and really the end of last year we have moved rental rates continuously and materially through the whole portfolio So, you know, what was $22 net effective rents went up 25 last quarter and now 29 this quarter. There is no specific tenant that drove either of the last 2 quarters in terms of an anomaly. It is driven by good leasing in the Sunbelt. Again, as I noted earlier, that is where we have seen the majority of our rental rate growth but Suburban Minneapolis to contribute to that. As well. The spreads going forward, you know, as we have noted in the prepared remarks, 25 to $30 NERs is certainly where I would say is what I would expect, and we will direct the street to consider or to evaluate the reality is that we continue to be able to push rents even further in these markets. And so I think saying that the portfolio is 10% to 15% below market and average rates in the Sunbelt, that is probably closer to 20 to 30. but blended through the portfolio, a 10% to 15% mark to market I think you are gonna continue to see releasing spreads in a similar vein. Great. Appreciate the comments, Brent. Operator: We have no further questions. I will turn the call back over to Brent Smith for closing remarks. Christopher Brent Smith: I want to thank everyone for joining us today. on the call. It was a phenomenal third quarter And I want to thank the Piedmont team for incredible execution across the entire platform, from leasing, obviously, but financial and continued capital markets transactional activity And everyone who has put forth a lot of effort to get us into the position we are today I also want to highlight we have put out our corporate responsibility report on the website. A recent addition with this year's annual report. Please look into that. It outlines our initiatives around sustainability, social impact and governance. And then finally, we are gonna be hosting meetings in Atlanta for NAREIT. On the 17th and 18th of November. And on the seventeenth, we are also hosting a tour of our 999 Peachtree Street project. And dinner with management at our Michelin Star restaurant in the building, Lazy Betty. So if you would like to join that, we are hosting that in conjunction with Truist. Please reach out to either Truist and Michael Lewis and team or Sherry and our team if you are interested in attending that event. We would love to host you and show you our recent renovation at 999 Peach Street. Thank you again, everyone, for joining. Have a great day. Operator: Thank you. This does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Piedmont Realty (PDM) Q3 2026 Earnings Call Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. - Management attributed record leasing metrics to the increasing scarcity of high-quality office space, driven by historically low construction deliveries and ongoing office-to-residential conversions. - The company achieved record-high net effective rents of $29.31 per square foot, representing a 30% increase over the trailing 12-month average due to enhanced landlord pricing power. - Operational success was supported by a tenth consecutive quarter where tenant expansions exceeded contractions, particularly among financial, engineering, and law firms. - Strategic capital recycling focused on acquiring differentiated assets like 4080 Wilson Boulevard in Arlington while executing a planned exit from the Houston market via the sale of Enclave Place. - Leasing spreads reached 26% on a cash basis and 35% on an accrual basis, which management cited as the second-highest in the company's history and evidence of embedded portfolio growth. - A transformative $230 million exchangeable notes offering successfully retired high-coupon debt, reducing the weighted average cost of debt by 70 basis points to 4.8%. - Annual core FFO guidance was raised to a range of $1.55 to $1.57 per share, reflecting the conversion of a $29 million signed-but-uncommenced revenue pipeline into earnings. - Management expects to maintain net effective rents in the mid-to-upper twenties, supported by asking rates that remain approximately 40% below the costs required for new construction. - The year-end in-service lease percentage is projected between 87.5% and 88.5%, accounting for recent acquisitions and the anticipated disposition of the 100% leased Enclave Place asset. - Future acquisitions are intended to be funded through the disposition of mature or non-core assets, with management remaining selective to ensure transactions are accretive to long-term growth. - A dividend reinstatement is not considered imminent for 2027 as the board evaluates taxable income factors, including debt redemption costs and capital requirements for leasing. - The redemption of 9.25% senior notes due in 2028 has eliminated all debt maturities until late 2028, significantly improving the company's financial flexibility. - The sale of the Royal Lane land parcel generated a $9 million gain, contributing to the company's capital recycling efforts in the Dallas market. - Management is deliberately preserving large blocks of space in high-demand submarkets like Atlanta's Central Perimeter to capture premium rents as market availability tightens. - Management explained that while redeploying proceeds accretively is challenging, they target assets with lease-up opportunities or modest repositioning needs to drive returns. - The acquisition of 4080 Wilson Boulevard was highlighted as an example of buying at a 10% cap rate with the potential to grow to a 12% yield through leasing. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. - Management reported no negative impact on tour activity or leasing dialogue from recent large-cap tech layoffs, noting their portfolio focuses more on resilient small-to-medium enterprises. - They suggested that some large corporations may be 'rightsizing' after over-hiring post-pandemic rather than purely reacting to AI-driven job reductions. - Pricing power is robust in Dallas, Atlanta, Northern Virginia, and Orlando, where replacement costs are significantly higher than current rents. - Management noted that while Boston and the D.C. district are currently more 'muted,' they represent a small portion of the portfolio and are beginning to show signs of recovery at the high end. - Sherry Rexroad clarified that the company does not currently forecast taxable income in 2027 or 2028, making a dividend reinstatement unlikely in the near term. - The board will continue to evaluate the dividend based on capital needs, which are expected to decline from recent peaks of over $200 million annually. - Piedmont is maintaining a patient approach with large blocks in Atlanta and Dallas, citing a healthy pipeline of prospects totaling nearly 900,000 square feet for those specific spaces. - Regarding U.S. Bank in Minneapolis, management noted the tenant rightsized their footprint but remains committed to the asset, which continues to see strong interest from other professional service firms.

Interested in Piedmont Realty Trust, Inc.? Here are five stocks we like better. Piedmont raised its 2026 outlook for the second consecutive quarter, increasing Core FFO guidance to $1.50–$1.55 per share and same-store cash and GAAP NOI growth guidance to 5%–8%. Second-quarter Core FFO rose to $0.38 per share, while same-store cash NOI increased 9%. Leasing momentum remained strong, with 460,000 square feet signed at a 14% cash rent increase and more than 32% on an accrual basis. Portfolio economic occupancy exceeded 80%, and signed but uncommenced leases represent roughly 570 basis points of future occupancy gains. Piedmont strengthened its balance sheet by refinancing and expanding a term loan to $400 million through 2031, leaving its $600 million credit line fully available. Management is prioritizing debt reduction and selective acquisitions, while dividend restoration is unlikely to be considered before 2027. Piedmont Realty Trust (NYSE:PDM) raised its 2026 outlook for a second consecutive quarter after reporting higher leasing activity, rental rates and same-store cash net operating income in the second quarter. Core funds from operations totaled $0.38 per diluted share, exceeding consensus by $0.01 and rising $0.02 from the prior-year quarter, according to Chief Financial Officer Sherry Rexroad. The company attributed the year-over-year gain primarily to higher rental rates and economic occupancy, partly offset by the sale of one project during the preceding 12 months. Second-quarter adjusted funds from operations were approximately $31 million. → Refiner Stocks Are Near Record Highs—Can Iran-Driven Margins Keep Them There? The office landlord increased its full-year Core FFO guidance to $1.50 to $1.55 per diluted share. The midpoint represents an increase of $0.025 per share from its original 2026 outlook and implies earnings growth of more than 8%, Rexroad said. Piedmont also raised its guidance range for cash and GAAP same-store NOI growth to 5% to 8%, a 200-basis-point increase from its original forecast. President and Chief Executive Officer Brent Smith said Piedmont signed 460,000 square feet of leases during the quarter, including rent increases of 14% on a cash basis and more than 32% on an accrual basis. Over the last four quarters, cash rental-rate growth has averaged 12%, he said. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now Co-Chief Operating Officer George Wells said the company completed 42 transactions totaling about 460,000 square feet, with new business accounting for slightly more than half of the volume. The average new lease was approximately 11,000 square feet and carried a weighted average term of about 11 years. For the ninth consecutive quarter, expansions exceeded contractions, Wells said. The company completed nine expansions totaling 22,000 square feet and reported no contractions during the period. Weighted average starting cash rent rose 5% sequentially to $43.79 per square foot. Leasing capital spending was $5.83 per square foot per year, compared with a trailing-12-month average of $5.97. Net effective rent increased to $25.56 per square foot, more than 20% above the prior trailing-12-month average. Second-quarter same-store cash NOI growth was 9%, while first-half cash same-store NOI growth was 10%. → 3 Value ETFs to Consider as Growth Stocks Lag Behind Smith said Piedmont has renovated 90% of its portfolio since 2020 and that its properties are leasing at record-high rental rates. He added that the company’s rents remain 35% to 40% below new-construction pricing, which he said provides room for additional increases. Economic occupancy in the in-service portfolio exceeded 80%, while the broader portfolio was approaching 90% leased as of June 30. Piedmont had executed leases not yet commenced representing about $39 million in annualized cash rents, equivalent to roughly 570 basis points of occupancy that is expected to flow into earnings over the coming quarters. Wells highlighted leasing activity in Northern Virginia, Atlanta and Dallas. In Northern Virginia’s RB Corridor, Piedmont signed its largest new lease of the quarter: a 12-year, 73,000-square-foot agreement with a defense contractor at 4250 North Fairfax. The lease is expected to begin once the space is built, with annualized net effective rent of $27 per square foot. Atlanta was Piedmont’s most active market, with 11 deals covering 130,000 square feet. The company signed a 57,000-square-foot, 15-year lease at 1155 Perimeter Center West that preemptively backfilled a large portion of Broadcom’s space. In Dallas, the company completed eight deals totaling 107,000 square feet. An 11-year extension with Epsilon drove much of that volume and produced a 42% cash rent roll-up, Wells said. Piedmont has raised asking net rent at Galleria Towers to $50 per square foot, up 40% from two years earlier when renovations were completed. At 60 Broad in New York, Piedmont said the city is progressing through internal reviews and a public-hearing process required for a renewal covering substantially all of the space. Smith said the transaction is now expected to be completed in the fourth quarter. The company said the holdover status is not expected to materially affect 2026 earnings. Piedmont’s redevelopment portfolio was 83% leased at quarter-end, up from 76% in the prior quarter. The company returned 222 Orange Avenue to service and expects the remaining out-of-service portfolio to stabilize around the end of 2026. Piedmont refinanced a term loan scheduled to mature in January 2027. The company increased the principal balance to $400 million from $325 million, extended maturity to May 2031 and reduced the spread by 15 basis points. Net proceeds from the increased borrowing were used to repay the balance on its credit line, leaving the company with its full $600 million line capacity and approximately $17 million in cash as of June 30. Rexroad said Piedmont has no debt maturities until 2028 and its weighted average cost of debt declined to 5.5%. She expects net debt to EBITDA to fall below 7 times by year-end as leases commence, with an intermediate goal of roughly 6.5 times in the 2027-to-2028 period and a longer-term target closer to 6 times. Smith said the company’s near-term capital allocation priority is debt reduction, including potential repurchases of its 9.25% bonds. He said stock repurchases are not currently a priority and that the company sees more attractive opportunities in acquisitions and debt reduction. The board would likely evaluate restoring the dividend no earlier than 2027, he added. Executive Vice President of Investments Chris Kollme said the office transaction market is improving, although institutional buyers remain limited and many deals are being awarded to local operators, family offices and private capital. Piedmont is targeting opportunities in existing markets that are accretive to earnings and support its growth strategy. The company’s Royal Lane land parcel in Dallas remains under contract and is expected to generate approximately $12 million in net proceeds if it closes in the third quarter. A separate Orlando land sale is progressing through rezoning and is expected to close around mid-2027. Piedmont continues to evaluate sales of mature or non-core properties and said it intends to prioritize high-return leasing capital, balance-sheet flexibility and acquisitions that improve portfolio quality. Smith said the company is particularly focused on Dallas and Northern Virginia and is seeking well-located, older properties that are generally 70% to 80% leased and can be repositioned through Piedmont’s operating strategy. Looking ahead, Wells said the company had more than 700,000 square feet in the legal stage for the third quarter and approximately 2 million square feet of outstanding proposals. Piedmont expects total 2026 leasing volume to reach the high end of its previously issued range, or about 2 million square feet. Piedmont Realty Trust is a real estate investment trust (REIT) headquartered in Atlanta, Georgia, that focuses on the ownership, acquisition and management of office properties. The company's portfolio comprises a mix of multi-tenant and single-tenant buildings, with a particular emphasis on small- to mid-size office campuses and urban infill properties. Piedmont Realty Trust structures its leases and property services to support a diversified base of tenants, including professional services firms, government agencies and technology companies. The company's operating model combines property management, leasing and strategic capital allocation to enhance asset value and drive income stability. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Piedmont Realty Trust Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

This article first appeared on GuruFocus. Release Date: July 29, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Piedmont Realty Trust Inc (NYSE:PDM) reported a strong quarter, beating consensus by a penny and raising their 2026 outlook for the second consecutive quarter. Leasing activity reached post-pandemic highs, with rental rate increases of 14% on a cash basis and over 32% on an accrual basis. The company achieved the highest quarterly average net effective rent after CapEx in its history, now reaching the mid-20s per square foot. Piedmont Realty Trust Inc (NYSE:PDM) has leased over 80% of its portfolio since the pandemic, indicating strong tenant retention and demand. The company successfully refinanced a term loan, increasing the principal and extending the maturity, which improved their financial flexibility. Despite strong performance, the office sector continues to face skepticism, which could impact future growth and investor sentiment. The New York City lease renewal process is delayed, with completion expected in the fourth quarter, potentially affecting short-term revenue. The office investment market remains cautious, with limited institutional investors and most transactions awarded to local operators. Piedmont Realty Trust Inc (NYSE:PDM) has not yet reinstated its dividend, despite having positive cash flow, which may concern income-focused investors. The company faces challenges in managing large lease expirations in 2027, requiring strategic planning to maintain occupancy and revenue. Warning! GuruFocus has detected 11 Warning Signs with PDM. Is PDM fairly valued? Test your thesis with our free DCF calculator. Q: Can you expand on the demand environment and what is causing it to accelerate despite macroeconomic uncertainties? A: George Wells, COO, explained that the leasing engine is strong, with employers seeking compelling environments for collaboration and cultural connection. Demand is broad across submarkets, with significant new deal activity. Brent Smith, CEO, added that the portfolio's focus on professional services and financial sectors, rather than tech, aligns with current demand trends, offering premium products at reasonable prices. Q: What are your long-term leverage target goals as you approach 2027 and 2028? A: Sherry Rexrode, CFO, stated that the company aims to reduce net debt to EBITDA below 7 times by the end of 2026, with an intermediate target of 6.5 times and a longer-term goal of 6 times by 2027-2028. Q: How competitive is the market in Northern Virginia, and do you expect activity to persist? A: Fred, a senior officer, noted that Northern Virginia has seen increased demand, particularly from defense contractors. The market has limited space availability, and the presence of a young workforce in the area supports continued demand. The company expects this trend to persist, benefiting their assets in the region. Q: What opportunities are you seeing on the acquisition side, and what do those deals look like? A: Chris Coleman, EVP of Investments, mentioned that the company is focused on off-market transactions in Dallas and Northern Virginia. They target assets with strong fundamentals that can be repositioned for higher yields, aiming for an 8.5% to 9.5% going-in yield, stabilizing above 10.5%. Q: Are improving fundamentals affecting disposition pricing, and what is your strategy for asset sales? A: Brent Smith, CEO, explained that while there is more debt availability and better leasing, pricing has remained stable. The company aims to sell mature or non-core assets, with cap rates between 8% and 9%, and redeploy proceeds into Sun Belt markets to enhance portfolio quality and earnings growth. For the complete transcript of the earnings call, please refer to the full earnings call transcript.