Piedmont Realty Trust, Inc. · NYSE:PDM
Piedmont Realty Trust — Piedmont Office Realty Trust — Citi Global Property CEO Conference 2024
25 slides from Piedmont Realty Trust's conference presentation, March 2024
Slide 1: Investor Presentation
INVESTOR PRESENTATION March 2024 0
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 Properties 51 Moody’s / S&P Ratings Baa3 / BBB- Square Footage 16.6 million Net Debt to Gross Assets 38.1% Percent Leased 87.1% Net Debt to EBITDA (TTM) 6.4x Weighted Average Lease Term 5.7 years Percent SF LEED Certified 69% Percent ALR Derived from Sunbelt 68% Perce
Slide 5: Portfolio Built For Hospitality-Infused Spaces
PORTFOLIO BUILT FOR… HOSPITALITY-INFUSED SPACES US Bancorp Center 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 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 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 Glenridge Highlands US Bancorp Center Galleria on the Park 100% of Portfolio WELL Health-Safety Rating 77
Slide 9: Portfolio Built For Community-Centered Experience
PORTFOLIO BUILT FOR… COMMUNITY-CENTERED XPERIENCE EXPERIENCE Braves Tailgate Masters Watch Party Make-A-Wish Fall Festival Tenant Pop-Up Tenant App 88
Slide 10: Reversal of Work From Home Sentiment
REVERSAL OF WORK FROM HOME SENTIMENT Pendulum is Swinging Back to the Office “Supply of remote positions continues to fall, while office mandates impact larger share of workforce.” 1 National Remote-Only Share of Job Openings Nearly Three Million U.S. Employees Subject to Has Fallen by Over Half in
Slide 11: 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 more than seven million square feet equating to almost 45% of its portfolio. Many factors influence a building’s demand profile. Since 2021 National Net Absorption by Age Since COV
Slide 12: Sample Piedmont Assets Built Before 2015
SAMPLE PIEDMONT ASSETS BUILT BEFORE 2015… CNL Center I & II | Built 1996, 2006 Arlington Gateway| Built 2005 One Lincoln| Built 1999 1180 Peachtree| Built 2006 999 Peachtree| Built 1987 Galleria 600| Built 2002 11
Slide 13: 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 9.8% 9.7% Hospitality-Driven
Slide 14: Leasing Success
LEASING SUCCESS 2023 was a record year for new leasing performance and revenue backlog Leasing Volume (000 SF) ~$35M New Renewal SF in Abatement or Yet to Commence backlog of cash revenue3 1550 1520 1390 1410 1140 1120 1010 940 850 750 830 720 730 760 260 2019 2020 2021 2022 2023 45% 8.5 years Post
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 14,800 15,000 10,000 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Looking Ahead The average size of expiring lease
Slide 16: Effective Capital Rotation to the Sunbelt
EFFECTIVE CAPITAL ROTATION TO THE SUNBELT 2019 2020 2021 2022 Expand Atlanta Expand Dallas Enter Midtown Expand Midtown Atlanta Atlanta ACQUIRED: $412 $465 $1.4 billion $304 Weighted Average $224 Leased of 85% SOLD: $1.4 billion ($313) Weighted Average Leased of 95% ($490) ($595) West Loop (CHI) Exi
Slide 17: Portfolio Overview
PORTFOLIO OVERVIEW 1180 Peachtree 999 Peachtree ALR by Market ALR by Industry1 Atlanta 28% Business Services 14% Dallas 20% Engineering, Accounting,… 14% Less than 2% of ALR Minneapolis 11% Legal Services 10% derived from Orlando 10% coworking New York 9% Governmental Entity 8% and limited 68% of AL
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 2.1M SF $37.50 1.6M SF $34.50 PDM owned PDM owned1 ~ $32.25 27% 20% Market share Market share ~ $31.00 ~$525M ~$450M Invested Invested Submarket rents PDM Asking
Slide 19: Redevelopment in Action – Galleria on the Park
REDEVELOPMENT IN ACTION – GALLERIA ON THE PARK REIMAGINED 2.1M SF ENVIRONMENT IS DELIVERING RESULTS Galleria New / Expansion Leasing Since 2021 (000 SF) New/Expansion Leases Leased % 400 353 100% ~750K 8.4 Years 17% New/expansion Weighted Average cash 300 90% leases signed average roll up 1 244 90%
Slide 20: Redevelopment in Action – Galleria 600 Case Study
REDEVELOPMENT IN ACTION – GALLERIA ON THE PARK CASE STUDY – GALLERIA 600 AT ACQUISITION IN 2019: RESULTS FOLLOWING $3.5M RENOVATION: Price: $96.5 million ($220/SF) Leasing: 250k SF of new or expansion Leased %: 34% after known vacates1 Leased %: 93% In-place Rents: $27/SF In-place Rents: $34/SF 1 PD
Slide 21: Future Leaseup Opportunities
FUTURE LEASEUP OPPORTUNITIES THE EXCHANGE | ORLANDO ONE LINCOLN PARK | DALLAS 93% 1Q 2024 46k SF Walker’s 59% Done 106k SF Very Leased Redevelopment Leaseup Oppty Leased Redevelopment Leaseup Oppty Complete Paradise1 Complete Walkable1 999 PEACHTREE | ATLANTA GALLERIA THREE | DALLAS 90% 4Q 2024 62k
Slide 22: Future Leaseup Opportunities
FUTURE LEASEUP OPPORTUNITIES 60 BROAD | NEW YORK CITY 25 MALL | BOSTON 87% 4Q 2023 133k SF Walker’s 54% Done 134k SF Unmatched Leased Redevelopment Leaseup Oppty Paradise1 Leased Redevelopment Leaseup Oppty Amenities Complete Complete MERIDIAN CROSSINGS | MINNEAPOLIS GALLERIA 100 | ATLANTA 5% 4Q 202
Slide 23: Financial Strength and Flexibility
FINANCIAL STRENGTH AND FLEXIBILITY PIEDMONT MAINTAINS A CONSERVATIVE, SIMPLE BALANCE SHEET PRO FORMA DEBT METRICS CURRENT RUN-RATE – FUNDS AVAILABLE 38.1% 6.4x Baa3 BBB- EBITDA – 2023 $310M - $325M Net Debt to Net Debt to Moody’s S&P Interest Expense – 2023 $105M - $95M Gross Assets Core EBITDA (TTM
Slide 24: Committed to a Sustainable Community
COMMITTED TO A SUSTAINABLE COMMUNITY PORTFOLIO ACCOMPLISHMENTS ENVIRONMENTAL GOALS Energy Star 20% Reduction Energy Use Intensity Partner of the Year Award by 2026 2021, 2022 and 2023 Green Lease Leader Silver Designation 20% Reduction Water Use Intensity 2022 by 2028 BOMA 360 20% Reduction Greenhou
Slide 25: 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 24
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