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1. Company Snapshot

1.a. Company Description

Piedmont Office Realty Trust, Inc.(NYSE: PDM) is an owner, manager, developer, redeveloper, and operator of high-quality, Class A office properties located primarily in select sub-markets within seven major Eastern U.S. office markets, with the majority of its revenue being generated from the Sunbelt.Its geographically-diversified, approximately $5 billion portfolio is currently comprised of approximately 17 million square feet.


The Company is a fully-integrated, self-managed real estate investment trust (REIT) with local management offices in each of its markets and is investment-grade rated by S&P Global Ratings (BBB) and Moody's (Baa2).At the end of the third quarter, approximately 63% of the company's portfolio was ENERGY STAR certified and approximately 41% was LEED certified.

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1.b. Last Insights on PDM

Piedmont Realty Trust's recent performance was driven by strong leasing momentum, with over 500,000 SF of leases signed in the second quarter, and a subsequent increase in full-year leasing guidance to 1.8-2.0 million SF. The company's Q2 FFO of $0.36 per share beat estimates, and management's strategic decision to eliminate the dividend was seen as a move to fund growth. With a rebranding to Piedmont Realty Trust, Inc., the company is focused on its PLACEs designed to elevate the workday, signaling a strong asset desirability.

1.c. Company Highlights

2. Piedmont's Q3 2025 Earnings: A Strong Turnaround in Office Demand

Piedmont's financial performance in Q3 2025 was marked by a Funds From Operations (FFO) per diluted share of $0.35, a $0.01 decrease from Q3 2024, primarily due to the sale of three projects and higher net interest expense, but offset by growth in operations from higher economic occupancy and rental rate growth. The company's Adjusted Funds From Operations (AFFO) for Q3 2025 was approximately $26.5 million. Piedmont exceeded consensus FFO by 3% and achieved core FFO of $0.41 per share, with its same-store Net Operating Income (NOI) turning positive this quarter.

Publication Date: Nov -30

📋 Highlights
  • Office Demand Surge:: U.S. office demand turned positive Q3, with 12 million sq ft occupied vs. returned, and 724,000 sq ft leased, pushing in-service lease percentage to 89.2%.
  • FFO & NOI Growth:: Exceeded consensus FFO by 3%, achieved $0.41 core FFO/share, and same-store NOI turned positive, with $35M in abatement set to generate cash in 2026.
  • Portfolio Stabilization:: Out-of-service assets reached >50% leased (targeting 70% by 2026), redevelopments surged to 54% leased (projected 60–70% by year-end), and $75M pending cash rent expected in 2026.
  • Debt & Liquidity:: Lowered debt rates by 10 bps, secured $435M revolver availability, and no maturities until 2028, while narrowing 2025 core FFO guidance to $1.40–$1.42/share.

Operational Highlights

The company's portfolio experienced record levels of leasing, with 724,000 square feet of total leasing during the quarter, including over 0.5 million square feet of new tenant leases, bringing the total year-to-date leasing to approximately 1.8 million square feet. This leasing success pushed its in-service lease percentage up to 89.2%, and it expects to achieve its year-end goal of 89% to 90% leased. Piedmont's weighted average lease term for new deal activity stayed consistent at approximately 10 years, and its weighted average starting cash rent was nearly $42 per square foot.

Leasing Pipeline and Redevelopment

Piedmont has a robust leasing pipeline, with over 400,000 square feet in the late-stage phase, and outstanding proposals remain steady at 2.4 million square feet. The company's redevelopment portfolio saw its lease percentage spike from 31% to 54%, and it is projected to reach 60% to 70% by year-end. According to Brent Smith, "the need for upgraded spaces that foster collaboration and innovation" is driving the surge in office demand.

Valuation and Growth Prospects

With a P/E Ratio of -15.47 and a P/S Ratio of 2.55, the market is pricing in a certain level of growth for Piedmont. Analysts estimate next year's revenue growth at 0.5%. The company's ability to drive earnings growth is supported by a strong leasing pipeline and potential for debt refinancing. Piedmont is targeting mid-single-digit FFO growth and has a runway for occupancy growth, with about $75 million of future additional annual cash rent from executed leases yet to commence and leases under abatement.

Debt and Capital Structure

Piedmont recently amended its revolving credit facility and term loan, lowering the all-in rate on each facility by 10 basis points, and currently has no debt maturities until 2028 and $435 million of availability under its revolving line of credit. The company's Net Debt / EBITDA ratio stands at 0.68, indicating a manageable debt burden.

3. NewsRoom

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Cabral Gold Drills New Mineralized Structure Connecting PDM and Central Gold Deposits, Cuiú Cuiú Gold District, Brazil

Dec -04

Source: newsfilecorp.com

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Piedmont Realty Trust, Inc. $PDM Stock Holdings Increased by Geode Capital Management LLC

Nov -29

Source: defenseworld.net

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PIEDMONT REALTY TRUST ANNOUNCES RESULTS OF TENDER OFFER FOR ANY AND ALL OF ITS OUTSTANDING 9.250% SENIOR NOTES DUE 2028

Nov -20

Source: globenewswire.com

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PIEDMONT REALTY TRUST ANNOUNCES PRICING OF CASH TENDER OFFER FOR ANY AND ALL OF ITS OUTSTANDING 9.250% SENIOR NOTES DUE 2028

Nov -19

Source: globenewswire.com

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Piedmont Realty Trust Announces Pricing of Senior Notes Offering

Nov -13

Source: globenewswire.com

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PIEDMONT REALTY TRUST COMMENCES OFFER TO PURCHASE ANY AND ALL OF ITS OUTSTANDING 9.250% SENIOR NOTES DUE 2028

Nov -13

Source: globenewswire.com

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Piedmont Realty Trust: Core FFO To Benefit From New Leases In The Short Term, Refinancing In The Long Term

Nov -03

Source: seekingalpha.com

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Piedmont Realty Trust, Inc. (PDM) Q3 2025 Earnings Call Transcript

Oct -28

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.03%)

6. Segments

Rental and Tenant Reimbursement

Expected Growth: 4.0%

Piedmont Office Realty Trust's 4.0% growth in Rental and Tenant Reimbursement is driven by increasing demand for Class A office spaces, strategic lease renewals and expansions, and a strong presence in high-growth markets. Additionally, the company's proactive asset management and capital recycling initiatives have contributed to the growth.

Other Property Related Income

Expected Growth: 4.65%

Piedmont Office Realty Trust's 4.65% growth in Other Property Related Income is driven by increasing demand for flexible office spaces, strategic acquisitions, and strong property management practices. Additionally, the company's focus on high-growth markets and diversification of its tenant base have contributed to this growth.

Property Management Fee

Expected Growth: 4.83%

Piedmont Office Realty Trust's 4.83% growth in Property Management Fee is driven by increasing demand for third-party management services, strategic acquisitions, and expansion into new markets. Additionally, the company's focus on operational efficiency and cost savings initiatives have contributed to the growth. Strong relationships with clients and a reputation for delivering high-quality services have also supported the increase in management fees.

7. Detailed Products

Class A Office Properties

High-quality office spaces located in central business districts, offering modern amenities and convenient access to public transportation

Suburban Office Properties

Office spaces located in suburban areas, providing easy access to highways and amenities, with a focus on convenience and affordability

Industrial Properties

Warehouses, distribution centers, and light industrial facilities, offering flexible space for logistics, manufacturing, and research

Mixed-Use Properties

Properties that combine office, retail, and residential spaces, offering a live-work-play environment

Land Development

Undeveloped land parcels, offering opportunities for future development and growth

8. Piedmont Office Realty Trust, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Piedmont Office Realty Trust, Inc. operates in a competitive industry, but the threat of substitutes is mitigated by the company's focus on high-quality office properties and its ability to adapt to changing market conditions.

Bargaining Power Of Customers

Piedmont Office Realty Trust, Inc.'s customers are primarily large corporations and government agencies, which have limited bargaining power due to the company's strong market position and high-quality properties.

Bargaining Power Of Suppliers

Piedmont Office Realty Trust, Inc. has a diversified supplier base, which reduces the bargaining power of individual suppliers. Additionally, the company's scale and market position give it negotiating power in procurement.

Threat Of New Entrants

The commercial real estate industry has high barriers to entry, including significant capital requirements and regulatory hurdles, which limits the threat of new entrants and gives Piedmont Office Realty Trust, Inc. a competitive advantage.

Intensity Of Rivalry

The commercial real estate industry is highly competitive, with many established players competing for a limited number of high-quality properties. Piedmont Office Realty Trust, Inc. must continually adapt and innovate to maintain its market position.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 54.41%
Debt Cost 3.95%
Equity Weight 45.59%
Equity Cost 9.57%
WACC 6.51%
Leverage 119.36%

11. Quality Control: Piedmont Office Realty Trust, Inc. passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Paramount Group

A-Score: 5.5/10

Value: 8.0

Growth: 3.2

Quality: 5.8

Yield: 3.0

Momentum: 8.0

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
JBG SMITH

A-Score: 5.4/10

Value: 5.3

Growth: 2.9

Quality: 2.3

Yield: 8.0

Momentum: 7.5

Volatility: 6.3

1-Year Total Return ->

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Stock-Card
Piedmont Office Realty Trust

A-Score: 5.4/10

Value: 7.5

Growth: 2.2

Quality: 4.9

Yield: 8.0

Momentum: 3.5

Volatility: 6.0

1-Year Total Return ->

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Brandywine Realty

A-Score: 5.0/10

Value: 6.8

Growth: 1.8

Quality: 4.5

Yield: 10.0

Momentum: 1.5

Volatility: 5.7

1-Year Total Return ->

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Orion Office REIT

A-Score: 5.0/10

Value: 7.8

Growth: 4.2

Quality: 3.6

Yield: 10.0

Momentum: 1.5

Volatility: 3.0

1-Year Total Return ->

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Franklin Street Properties

A-Score: 4.8/10

Value: 8.2

Growth: 0.6

Quality: 3.1

Yield: 7.0

Momentum: 5.0

Volatility: 5.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

8.2$

Current Price

8.2$

Potential

-0.00%

Expected Cash-Flows