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- **Record Leasing**: 724,000 sq. ft. in Q3, 1.8M YTD, with 900,000 sq. ft. of new leasing in vacant space. 20%+ rental rate increases across portfolio.
- **Backlog Growth**: $40M annualized uncommenced leases, to commence by end-2026. 2025 FFO guidance narrowed to $1.40-1.42/share.
- **Debt Refinancing**: Potential $0.17/share accretion from refinancing 9.25% bonds. No maturities until 2028.
- **Strategic Expansion**: $800M+ value-add acquisition pipeline in Sunbelt markets. Minneapolis out-of-service portfolio 54% leased vs. 31% Q2.
- **NYC Lease Update**: 60 Broad Street renewal delayed to early 2026. Positive outlook for renewal with $8M holdover penalty.


**【CEO Opening Remarks】**
- U.S. office market recovery: 12 million sq. ft. net absorption in Q3 2025, highest since Q2 2019. Piedmont leased 724,000 sq. ft. in Q3, 1.8M YTD, with 900,000 sq. ft. of new leasing in vacant space.
- Rental rate growth: 20%+ increases across portfolio, e.g., Atlanta's Galleria on the Park from $40 to $48/sq. ft. in 2024-2025.
- Backlog of uncommenced leases: $40M annualized, to commence by end-2026. FFO guidance: $1.40-1.42/share for 2025, mid-single-digit growth expected in 2026-2027.

**【COO Operational Update】**
- Q3 leasing: 750,000 sq. ft. (75% new tenants), 9% cash roll-up, 20% accrual roll-up. Minneapolis out-of-service portfolio 50% leased, targeting 90%+ by end-2026.
- Key markets: Atlanta (250,000 sq. ft. leased), Minneapolis (200,000 sq. ft.), Dallas (156,000 sq. ft.). 999 Peachtree in Atlanta nearing backfill of 150,000 sq. ft. at higher rates.
- Pipeline: 400,000 sq. ft. in late-stage, 2.4M sq. ft. in proposals. Weighted average lease term 10 years.

**【CFO Financial Review】**
- Q3 2025 Core FFO: $0.35/share (down $0.01 YoY due to asset sales). AFFO: $26.5M. Debt refinancing: 10bps rate reduction on credit facilities.
- Future growth: $75M annualized cash rent from 1.1M sq. ft. in abatement, 1M sq. ft. uncommenced. Refinancing 9.25% bonds could save $21M/year ($0.17/share).
- Guidance: Narrowed 2025 FFO to $1.40-1.42/share. No maturities until 2028; $435M revolver available.

**【Q&A Highlights】**
- **Leasing Momentum**: 5Q streak of net positive expansions (16 expansions vs. 2 contractions in Q3). 2.4M sq. ft. proposals, 70% for new space.
- **Debt Refinancing**: 9.25% bonds could be refinanced at 400bps spread, saving $0.17/share. No gating factors beyond market timing.
- **Acquisition Strategy**: Seeking $800M+ value-add opportunities in Sunbelt markets. Focus on well-located, amenitized assets with 70%+ occupancy.
- **New York City Lease**: 60 Broad Street renewal delayed to early 2026. $8M holdover penalty if not renewed. Positive outlook for renewal.
- **Economic Resilience**: Despite layoffs, 70% of Q3 new leasing for upgraded space, not cost-cutting. Minneapolis out-of-service portfolio 54% leased vs. 31% Q2.


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

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

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Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

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Income Tax Adjustments

Net Income from Continuing Operations

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Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

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Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

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Diluted EPS from Discontinued Operations

PDM

PDM fundamentals

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