Piedmont Realty Trust, Inc. · NYSE:PDM
Piedmont Realty Trust — Piedmont Office Realty Trust — Bank of America Global Real Estate Conference 2024
24 slides from Piedmont Realty Trust's conference presentation, September 2024
Slide 1: Bank of America Global Real Estate Conference Investor Presentation
Bank of America Global Real Estate Conference Investor Presentation 0 September 2024
Slide 2: Disclaimer
DISCLAIMER Piedmont Office Realty Trust, Inc. (also referred to herein as "Piedmont" or the "Company") (NYSE: PDM) is an owner, manager, developer, redeveloper and operator of high-quality, Class A office properties located primarily in major U.S. Sunbelt markets. The Company is a fully-integrated,
Slide 3: Piedmont Overview
PIEDMONT OVERVIEW 1180 Peachtree SUNBELT-FOCUSED portfolio of differentiated professional environments STRATEGIC capital allocator NIMBLE, well-capitalized owner SUSTAINABLE COMMUNITY minded leader 22
Slide 4: Piedmont Overview
PIEDMONT OVERVIEW 999 Peachtree Projects 31 Moody’s / S&P Ratings Baa3 / BBB- Square Footage 15.7 million Net Debt to Gross Assets 39.1% Percent Leased 87.3% Net Debt to EBITDA (TTM) 6.6x Weighted Average Lease Term 6.1 years Percent SF LEED Certified 72% Percent ALR Derived from Sunbelt 70% Percent
Slide 5: Portfolio Built For... Hospitality-Infused Spaces
PORTFOLIO BUILT FOR… HOSPITALITY-INFUSED SPACES US Bancorp Center 86% OF PORTFOLIO ALR CONTAINS COLLABORATION/TRAINING SPACES Galleria on the Park Three Galleria 44
Slide 6: Portfolio Built For... Amenity-Rich Environments
PORTFOLIO BUILT FOR… AMENITY-RICH ENVIRONMENTS Starbucks at Galleria on the Park 95% OF PORTFOLIO ALR CONTAINS FOOD AND BEVERAGE OFFERINGS NoVA Farmer’s Markets Toyota Music Factory C+S Seafood at Galleria on the Park Truist Park The Battery ATL Colony Square Food Hall 55
Slide 7: Portfolio Built For... Room to Breathe
PORTFOLIO BUILT FOR… ROOM TO BREATHE 1180 Peachtree 79% OF PORTFOLIO ALR CONTAINS OUTDOOR MEETING SPACES 999 Peachtree CNL Center Two Galleria The Exchange 66
Slide 8: Portfolio Built For... Health and Wellness
PORTFOLIO BUILT FOR… HEALTH AND WELLNESS IronWorx Studio 91% OF PORTFOLIO ALR CONTAINS AN ELEVATED FITNESS SPACE Glenridge Highlands US Bancorp Center Galleria on the Park 77
Slide 9: Portfolio Built For... Community-Centered Experience
PORTFOLIO BUILT FOR… The company didn’t limit its search for office space to the COMMUNITY-CXPERIENCE ENTERED EXPERIENCE Cumberland-Galleria market. It tried to get some perspective on the advantages of moving to an area ALL OF OUR MULTI-TENANTED ASSETS HAVE TENANT ENGAGEMENT PROGRAMS where employee
Slide 10: Not All Office Competes Equally
NOT ALL OFFICE COMPETES EQUALLY Leasing Is Not Determined by “Year Built” Since the onset of COVID, Piedmont has leased almost 8.9 million square feet equating to over 50% of its current portfolio. Many factors influence a building’s demand profile. National Net Absorption by Age Since COVID-19 Onse
Slide 11: Sample Piedmont Assets Built Before 2015
SAMPLE PIEDMONT ASSETS BUILT BEFORE 2015… CNL Center I & II | Built 1996, 2006 Arlington Gateway| Built 2005 Galleria 600 | Built 2002 1180 Peachtree| Built 2006 999 Peachtree| Built 1987 US Bancorp| Built 2000 10 10
Slide 12: Not All Office Competes Equally
NOT ALL OFFICE COMPETES EQUALLY News Headlines Have Influenced Market Perception vs. Reality “In our dataset of 2.7 billion RSF across the Top-25 MSAs…50% of vacancy is concentrated in the bottom 10% of assets.” 1 How Piedmont Competes Piedmont Cash Rental Rate Roll-Ups 13.6% Hospitality-Driven Comp
Slide 13: Leasing Success
LEASING SUCCESS Compelling YTD leasing statistics with healthy pipeline for the second half of 2024. ~$51M backlog of Leasing Volume (000 SF) cash revenue3 New Renewal SF in Abatement or Yet to Commence 1,600 1,550 1,520 1,390 1,410 1,140 1,120 1,010 940 850 750 830 805 720 730 760 730 260 2019 2020
Slide 14: Industry Leading Cash Flow Growth
INDUSTRY LEADING CASH FLOW GROWTH Office Sector Historical Same Store Cash NOI Growth – 2018-2023 Average 7.1% PDM 2024 Cash SSNOI Guidance: 2.0% - 3.0% 4.9% 4.8% 3.5% 3.1% 3.0% 2.8% 2.6% 2.4% 2.0% 2.0% 1.9% 1.9% 1.8% 1.3% 1.0% 0.1% ARE KRC ESRT PDM CUZ AAT PGRE BXP HPP HIW EQC SLG CDP VNO DEI BDN J
Slide 15: Targeted High-Service Offering Catering to Small and Medium Sized Enterprises
TARGETED HIGH-SERVICE OFFERING CATERING TO SMALL AND MEDIUM SIZED ENTERPRISES Portfolio Average Lease Size (SF) 45,000 40,300 40,000 35,000 30,000 25,000 20,000 14,200 15,000 10,000 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Looking Ahead • Average size of remaining 2
Slide 16: Effective Capital Rotation to the Sunbelt
EFFECTIVE CAPITAL ROTATION TO THE SUNBELT 2019 2020 2021 2022 2024 Expand Atlanta Expand Dallas Enter Midtown Expand Midtown Atlanta Atlanta ACQUIRED: $412 $465 $1.4 billion $304 Weighted Average $224 Leased of 85% ($77) SOLD: $1.5 billion ($313) Weighted Average Leased of 92% ($490) ($595) West Loo
Slide 17: Portfolio Overview
PORTFOLIO OVERVIEW 1180 Peachtree 999 Peachtree ALR by Market ALR by Industry1 Atlanta 30% Business Services 15% Dallas 19% Engineering,… 14% Less than 2% of ALR Orlando 11% derived from New York 9% Legal Services 10% coworking Minneapolis 8% and limited 70% of ALR Governmental Entity 9% Boston 7% t
Slide 18: Concentrated Nodes in Mixed Use Environments Yield Differentiated Rents
CONCENTRATED NODES IN MIXED USE ENVIRONMENTS YIELD DIFFERENTIATED RENTS ATLANTA – Cumberland / Galleria Submarket ORLANDO – CBD Submarket 2.2M SF $40.00 1.6M SF $34.50 PDM owned PDM owned 1 ~ $32.25 28% 20% Market share Market share ~ $31.75 ~$525M ~$450M Invested Invested Submarket rents PDM Asking
Slide 19: Redevelopment Track Record
REDEVELOPMENT TRACK RECORD GALLERIA 600 | ATLANTA CRESCENT RIDGE II | MINNEAPOLIS 44% 95% 180% 72% 92% 37% Leased Trough Q2 ‘24 GAAP NOI Leased Trough Q2 ’24 GAAP NOI (Q4 ‘21) Leased Increase (Q1 ‘22) Leased Increase 999 PEACHTREE | ATLANTA 501 W CHURCH | ORLANDO 77% 89% 26% 0% 100% 63% Leased Troug
Slide 20: Lease-Up Opportunities Underway
LEASE-UP OPPORTUNITIES UNDERWAY THE EXCHANGE | ORLANDO THREE GALLERIA | DALLAS 75% 3Q 2024 196k SF Walker’s 88% 3Q 2024 62k SF Very Leased 2 Redevelopment Leaseup Oppty 2 Leased Redevelopment Leaseup Oppty 3 Complete Paradise 1 Complete Walkable 1 ARLINGTON GATEWAY | NORTHERN VA 25 BURLINGTON MALL |
Slide 21: Future Redevelopment Opportunities
FUTURE REDEVELOPMENT OPPORTUNITIES ONE & TWO MERIDIAN| MINNEAPOLIS EXCELSIOR CROSSINGS | MINNEAPOLIS 7% 2Q 2025 367k SF $15/SF $107/SF 0% 1Q 2025 259k SF $15/SF $67/SF Leased Redevelopment Leaseup Anticipated Basis Leased Redevelopment Leaseup Anticipated Basis Complete Oppty Cost Complete Oppty Cos
Slide 22: Financial Strength and Flexibility
FINANCIAL STRENGTH AND FLEXIBILITY PIEDMONT MAINTAINS A CONSERVATIVE, SIMPLE BALANCE SHEET PRO FORMA DEBT METRICS NORMALIZED RUN-RATE – FUNDS AVAILABLE 39.1% 6.6x Baa3 BBB- EBITDA – 2024 $310M - $320M Net Debt to Net Debt to Moody’s S&P Interest Expense – 2024 $123M - $115M Gross Assets Core EBITDA
Slide 23: Committed to a Sustainable Community
COMMITTED TO A SUSTAINABLE COMMUNITY PORTFOLIO ACCOMPLISHMENTS ENVIRONMENTAL GOALS GRESB Rating, 2023 30% Reduction Energy Use Intensity One of 12 among 72 reporting REITs by 2030 LEED 30% Reduction Water Use Intensity Certified 72% of Total Square Footage by 2030 62% LEED Gold or Higher Energy Star
Slide 24: www.piedmontreit.com
www.piedmontreit.com Corporate Headquarters Institutional AnalystContact InvestorRelations 5565 Glenridge Connector, suite 450 T: 770.418.8592 T: 866.354.3485 Atlanta, GA 30342 E: research.analysts@piedmontreit.com E: investor.services@piedmontreit.com T: 770.418.8800 23
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