Piedmont Realty Trust, Inc. · NYSE:PDM
Piedmont Realty Trust — Piedmont Office Realty Trust — NAREIT REITworld Conference 2023
26 slides from Piedmont Realty Trust's conference presentation, November 2023
Slide 1: Investor Presentation
INVESTOR PRESENTATION November 2023 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 Baa2 / BBB Square Footage 16.6 million Net Debt to Gross Assets 38.2% Percent Leased 86.7% Net Debt to EBITDA (TTM) 6.4x Weighted Average Lease Term 5.5 years Percent SF LEED Certified 1 69% Percent ALR Derived from Sunbelt 68% Perc
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: Reversal of Work From Home Sentiment
REVERSAL OF WORK FROM HOME SENTIMENT ORIGINAL POSTURE CURRENT POSTURE “Before the pandemic, we had thousands of people working in “We want to see Googlers connecting and collaborating in locations separate from their core teams. I fully expect those person, so we’re limiting remote work to exception
Slide 12: 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 over 40% of its portfolio. Many factors influence a building’s demand profile. National Net Absorption by Age Since COVID-19 Onset1
Slide 13: Sample Piedmont Assets Built Before 2015
SAMPLE PIEDMONT ASSETS BUILT BEFORE 2015… 1180 Peachtree Built 2006 CNL I & II Built 1999, 2006 999 Peachtree Built 1987 One Lincoln Park Built 1999 Galleria 600 Built 2002 Arlington Gateway Built 2005 12 12
Slide 14: 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 Hospitality-Driven Community
Slide 15: Leasing Success
LEASING SUCCESS 2023 is already a record year for new leasing performance and revenue backlog. Leasing Volume (000 SF) New Renewal SF in Abatement or Yet to Commence ~$40M backlog of cash revenue3 1,550 1,520 1,390 1,230 1,140 1,255 1,010 940 850 750 760 775 720 730 260 2019 2020 2021 2022 2023 YTD
Slide 16: 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 14,600 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 17: 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 18: Portfolio Overview
PORTFOLIO OVERVIEW 1180 Peachtree 999 Peachtree ALR by Market ALR by Industry1 Atlanta 28% Business Services 15% Dallas 20% Engineering, Accounting,… 14% Less than 2% of ALR Minneapolis 12% Legal Services 10% derived from Orlando 10% coworking New York 9% Governmental Entity 8% and limited 68% of AL
Slide 19: 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 $37.50 $34.50 2.1M SF 1.6M SF PDM owned PDM owned1 $32.28 28% 20% Market share Market share $31.00 ~$525M ~$450M Invested Invested Submarket rents PDM rents Subma
Slide 20: 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 20211 (000 SF) 350 New/Expansion Leases Leased % 342 100% ~740K 8.4 Years 17% New/expansion Weighted Average cash 244 90% leases signed average roll up 1,2 250 9
Slide 21: Redevelopment in Action – Galleria on the Park
REDEVELOPMENT IN ACTION – GALLERIA ON THE PARK After CASE STUDY – GALLERIA 600 Before AT ACQUISITION IN 2019: Price: $96.5 million ($220/SF) Leased %: 34% after known vacates1 In-place Rents: $27/SF After RESULTS FOLLOWING $3.5M RENOVATION: Leasing: 250k SF of new or expansion Before Leased %: 93% I
Slide 22: Future Leaseup Opportunities
FUTURE LEASEUP OPPORTUNITIES THE EXCHANGE, ORLANDO ONE LINCOLN PARK, DALLAS 91% 1Q 2024 58k SF Walker’s 58% Done 108k SF Very Leased Redevelopment Complete Leaseup Oppty Paradise1 Leased Redevelopment Complete Leaseup Oppty Walkable1 999 PEACHTREE, ATLANTA GALLERIA THREE, DALLAS 86% 4Q 2024 88k SF W
Slide 23: Future Leaseup Opportunities
FUTURE LEASEUP OPPORTUNITIES 60 BROAD, NEW YORK CITY 25 BURLINGTON MALL, BOSTON 87% 4Q 2023 133k SF Walker’s 53% Done 136k SF Unmatched Leased Redevelopment Leaseup Oppty Paradise1 Leased Redevelopment Leaseup Oppty Amenities Complete Complete MERIDIAN CROSSINGS, MINNEAPOLIS GALLERIA 100, ATLANTA 5%
Slide 24: Financial Strength and Flexibility
FINANCIAL STRENGTH AND FLEXIBILITY PIEDMONT MAINTAINS A CONSERVATIVE, SIMPLE BALANCE SHEET DEBT METRICS AT 9/30/2023 CURRENT RUN-RATE – FUNDS AVAILABLE EBITDA – 2023 $310M - $325M 38.2% 6.4x Baa2 BBB Interest Expense – 2023 $105M - $95M Net Debt to Net Debt to Moody’s S&P Gross Assets Core EBITDA (T
Slide 25: Committed to a Sustainable Community
COMMITTED TO A SUSTAINABLE COMMUNITY PORTFOLIO ACCOMPLISHMENTS ENVIRONMENTAL GOALS AS OF OCTOBER 31, 2023 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 by 2028 2022 BOMA 360
Slide 26: www.piedmontreit.com
www.piedmontreit.com Corporate Headquarters Institutional AnalystContact Investor Relations 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 25
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