Piedmont Office Realty Trust Reports Mixed Q3 Results, Net Loss, and Improved Leasing Metrics

Piedmont Office Realty Trust, Inc. reported its financial results for the third quarter and the nine months ended September 30, 2024, highlighting a mixed performance in revenue and profitability compared to the previous fiscal period.

For the third quarter of 2024, Piedmont generated rental and tenant reimbursement revenue of $132.8 million, a decrease from $141.5 million in Q3 2023. For the nine months ended September 30, 2024, total revenue was $427.1 million, down from $432.3 million in the same period last year. The decline in revenue is attributed to lost income from tenant expirations and property dispositions. Total expenses for Q3 2024 were $120.4 million, a reduction from $136.2 million in Q3 2023, contributing to a net loss of $11.5 million, significantly improved from a net loss of $17.0 million in the prior year. The net loss applicable to common stockholders for the nine months ended September 30, 2024, was $49.1 million, compared to $20.4 million in 2023.

Piedmont's total assets as of September 30, 2024, were $4.1 billion, an increase from $4.1 billion at the end of 2023, while total liabilities rose to $2.5 billion from $2.3 billion. Stockholders' equity decreased to $1.6 billion from $1.7 billion at year-end 2023. The company’s consolidated indebtedness included a secured fixed-rate mortgage of $193.3 million and total unsecured debt of $2.2 billion, with a weighted average effective interest rate of 6.01%.

Strategically, Piedmont issued $400 million in senior notes during the nine months, using the proceeds to repay existing debt. The company also entered into a new $200 million unsecured term loan, further enhancing its liquidity position. The leasing status improved, with 88.8% of its portfolio leased as of September 30, 2024, up from 87.1% at the end of 2023. The company completed approximately 2.0 million square feet of leasing during the nine months, including 938,000 square feet of new leases.

Piedmont recognized an impairment charge of approximately $17.5 million related to the 750 West John Carpenter Freeway building, which was sold in July 2024. The company also reported a goodwill impairment charge of $11.0 million in the previous year, reflecting ongoing adjustments to its asset valuations.

Overall, while Piedmont faced challenges in revenue generation and profitability, strategic debt management and improved leasing metrics indicate a focus on stabilizing its financial position moving forward.