Highlights for the Quarter Ended
Financial Results:
- The Company reported net income applicable to common stockholders of
$9.9 million , or$0.08 per diluted share, for the quarter endedJune 30, 2021 , as compared to$192.4 million , or$1.52 per diluted share, for the quarter endedJune 30, 2020 with the prior year's second quarter reflecting a$191.4 million gain on the sale of1901 Market Street , - Piedmont reported Core Funds From Operations of
$60.4 million , or$0.48 per diluted share, for the quarter endedJune 30, 2021 , as compared to$61.6 million , or$0.49 per diluted share, for the quarter endedJune 30, 2020 . - Piedmont reported an approximately 5% increase in Same Store Net Operating Income, on both a cash basis and accrual basis, for the quarter ended
June 30, 2021 , as compared to the quarter endedJune 30, 2020 .
Leasing:
- The Company completed over 664,000 square feet of leasing, including approximately 154,000 square feet of new tenant leasing, as well as a 5-year, 313,000 square foot renewal with the
City of New York at60 Broad Street . - Piedmont reported a 27.4% and a 18.2% roll up in accrual and cash basis rents, respectively, based on leases executed during the quarter ended
June 30, 2021 for space vacant one year or less. - Occupancy remained relatively flat, ending the downward pressure caused by reduced leasing activity during the COVID-19 pandemic.
Capital Markets:
- Entered into a binding contract to sell 225 &
235 Presidential Way inWoburn, MA for$129.0 million , or$293 per square foot, to an investment-grade buyer. The sale is expected to close near the end of 2021, subject to customary closing conditions.
Balance Sheet:
- The Company repaid its last remaining secured debt during the second quarter of 2021, a
$35 million fixed rate mortgage. As ofJune 30, 2021 , the Company had no collateralized real estate assets. - The Company's average net debt-to-Core EBITDA ratio as of
June 30, 2021 was 5.7 x. - The Company's Debt-to-Gross Assets ratio was 34.6% as of
June 30, 2021 . - As of
June 30, 2021 , the Company had approximately$424 million of available capacity on its$500 million line of credit.
ESG:
- The Company published its Environmental, Social, and Governance ("ESG"") Annual Report which incorporates all
Sustainability Accounting Standards Board ("SASB") metrics and aligns withTask Force on Climate-related Financial Disclosure ("TCFD") disclosure and is available on Piedmont's website, www.piedmontreit.com, under the ESG tab. - Reductions in water usage, power consumption, greenhouse gas emissions, and improved waste management resulted in Piedmont being named an ENERGY STAR Partner of the Year for 2021.
Results for the Quarter ended
Piedmont recognized net income applicable to common stockholders for the three months ended
Funds From Operations ("FFO") which removes the impact of the gain on sale of real estate asset mentioned above, as well as depreciation and amortization, was
Core Funds From Operations ("Core FFO"), which removes the loss on early extinguishment of debt mentioned above, as well as the same items enumerated in calculating FFO was
Total revenues were
Property operating costs were
General and administrative expense was
Leasing Update
During the three months ended
- In
Atlanta : Greensky, LLC andCampbell & Brannon, LLC renewed 51,000 square feet and 11,000 square feet, respectively at Glenridge Highlands Two;Balfour Beatty Construction, LLC signed a new tenant lease for approximately 12,000 square feet at Galleria 300. - In
Orlando :AssuredPartners, Inc. signed a new tenant lease for approximately 44,000 square feet, andValley National Bank signed a renewal and expansion totaling approximately 11,000 square feet at CNL Center I. - In
Dallas :Dairy Farmers of America, Inc. signed a new tenant lease for approximately 44,000 square feet atOne Lincoln Park , andAlcority Capital LLC renewed approximately 10,000 square feet at6565 North MacArthur Boulevard .
Leases executed during the second quarter of 2021 for recently occupied space reflected a 27.4% and 18.2% roll up in accrual and cash rents, respectively. As of
Same Store Net Operating Income ("Same Store NOI") increased 4.8% and 4.7% on a cash and accrual basis, respectively, for the quarter ended
Further details outlining Piedmont's largest upcoming lease commencements and expirations, the status of certain major leasing activity and a schedule of the largest lease abatements can be found in the Company's quarterly supplemental information package available at www.piedmontreit.com.
Transactional and Financing Activity
During the three months ended
During the three months ended
ESG Initiatives
The Company recently published its ESG Annual Report which incorporates expanded environmental reporting to include all SASB metrics and incorporates information that aligns with the TCFD. Highlights of the report, which is available on Piedmont's website, www.piedmontreit.com, under the ESG tab, include:
- Establishment of the Piedmont Scholars Program at
Morehouse University inAtlanta andHoward University inWashington, D.C ; - Issuance of the Company's inaugural green bonds with proceeds used to purchase a Leadership in Energy and Environmental Design ("LEED") certified project in
Dallas, TX ; - Ranking third out of all office REITs and twelfth out of 79 REITs in Green Street’s 2019 Corporate Governance Rankings;
- Scoring a "1" (highest possible rating) on its ISS Governance QualityScore (as of
July 1 , 2021).
As of
- 20 LEED certified buildings;
- 45 buildings with
Building Owners and Managers Association ("BOMA") 360 designations; - 42 ENERGY STAR certified buildings;
13 The Outstanding Building of the Year ("TOBY") past or present award winners; and- 5
WELL Health & Safety rated buildings.
Piedmont is one of the top five companies nationwide with the most BOMA360 buildings and renewals and plans to obtain portfolio-wide
Third Quarter 2021 Dividend Declaration
On
Guidance for 2021
The following financial guidance for calendar year 2021 has been raised to the upper end of our previously published range (which was
(in millions, except per share data) | Low | High | ||||||
Net Income | $ | 38 | $ | 40 | ||||
Add: | ||||||||
Depreciation | 117 | 120 | ||||||
Amortization | 82 | 84 | ||||||
NAREIT FFO and Core FFO applicable to common stock | $ | 237 | $ | 244 | ||||
NAREIT FFO and Core FFO per diluted share | $ | 1.90 | $ | 1.96 |
The above financial guidance is based on information available to management as of the date of this release and does not include the effects of any potential acquisition or disposition activity that may be completed during the year. These estimates reflect management's view of current market conditions and incorporate certain economic and operational assumptions and projections, including those related to the pace and strength of the ongoing economic recovery from the COVID-19 pandemic. Actual results could differ materially from these estimates based on a variety of factors as discussed under "Forward-Looking Statements" below.
Note that individual quarters may fluctuate on both a cash basis and an accrual basis due to the timing of the business recovery from the COVID-19 pandemic, the timing of lease commencements and expirations, abatement periods, repairs and maintenance expenses, capital expenditures, capital markets activities, seasonal general and administrative expenses, accrued potential performance-based compensation expenses, and one-time revenue or expense events.
Non-GAAP Financial Measures
To supplement the presentation of the Company’s financial results prepared in accordance with
Each of the non-GAAP measures included in this release and the accompanying quarterly supplemental financial information has limitations as an analytical tool and should not be considered in isolation or as a substitute for an analysis of the Company’s results calculated in accordance with GAAP. In addition, because not all companies use identical calculations, the Company’s presentation of non-GAAP measures in this release and the accompanying quarterly supplemental information may not be comparable to similarly titled measures disclosed by other companies, including other REITs. The Company may also change the calculation of any of the non-GAAP measures included in this news release and the accompanying supplemental financial information from time to time in light of its then existing operations.
Conference Call Information
Piedmont has scheduled a conference call and an audio web cast for
Supplemental Information
Quarterly supplemental information as of and for the period ended
About
Forward-Looking Statements
Certain statements contained in this press release constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Company intends for all such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act, as applicable. Such information is subject to certain risks and uncertainties, as well as known and unknown risks, which could cause actual results to differ materially from those projected or anticipated. Therefore, such statements are not intended to be a guarantee of the Company`s performance in future periods. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as "may," "will," "expect," "intend," "anticipate," "estimate," "believe," "continue" or similar words or phrases that are predictions of future events or trends and which do not relate solely to historical matters. Examples of such statements in this press release include: the anticipated continued momentum in the Company's leasing pipeline, the expected timing of dispositions, and the Company's estimated range of Net Income, Depreciation, Amortization, NAREIT FFO/Core FFO and NAREIT FFO/Core FFO per diluted share for the year ending
The following are some of the factors that could cause the Company's actual results and its expectations to differ materially from those described in the Company's forward-looking statements: actual or threatened public health epidemics or outbreaks, such as the ongoing COVID-19 pandemic, and governmental and private measures taken to combat such health crises, which may affect our personnel, tenants, tenants' operations and ability to pay lease obligations, demand for office space, and the costs of operating our assets; the adequacy of our general reserve related to tenant lease-related assets established as a result of the COVID-19 pandemic, as well as the impact of any increase in this reserve or the establishment of any other reserve in the future; economic, regulatory, socioeconomic changes, and/or technology changes (including accounting standards) that impact the real estate market generally, or that could affect patterns of use of commercial office space; the impact of competition on our efforts to renew existing leases or re-let space on terms similar to existing leases; changes in the economies and other conditions affecting the office sector in general and specifically the seven markets in which we primarily operate where we have high concentrations of our annualized lease revenue; lease terminations, lease defaults, or changes in the financial condition of our tenants, particularly by one of our large lead tenants; adverse market and economic conditions, including any resulting impairment charges on both our long-lived assets or goodwill resulting therefrom; the success of our real estate strategies and investment objectives, including our ability to identify and consummate suitable acquisitions and divestitures; the illiquidity of real estate investments, including regulatory restrictions to which REITs are subject and the resulting impediment on our ability to quickly respond to adverse changes in the performance of our properties; the risks and uncertainties associated with our acquisition and disposition of properties, many of which risks and uncertainties may not be known at the time of acquisition or disposition; development and construction delays and resultant increased costs and risks; our real estate development strategies may not be successful; future acts of terrorism, civil unrest, or armed hostilities in any of the major metropolitan areas in which we own properties, or future cybersecurity attacks against any of our tenants; risks related to the occurrence of cyber incidents, or a deficiency in our cybersecurity, which could negatively impact our business by causing a disruption to our operations, a compromise or corruption of our confidential information, and/or damage to our business relationships; costs of complying with governmental laws and regulations; uninsured losses or losses in excess of our insurance coverage, and our inability to obtain adequate insurance coverage at a reasonable cost; additional risks and costs associated with directly managing properties occupied by government tenants, including an increased risk of default by government tenants during periods in which state or federal governments are shut down or on furlough; significant price and volume fluctuations in the public markets, including on the exchange which we listed our common stock; changes in interest rates and changes in the method pursuant to which the LIBOR rates are determined and the planned phasing out of USD LIBOR after
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company cannot guarantee the accuracy of any such forward-looking statements contained in this press release, and the Company does not intend to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
Research Analysts/ Institutional Investors Contact:
770-418-8592
research.analysts@piedmontreit.com
Shareholder Services/Transfer Agent Services Contact:
866-354-3485
investor.services@piedmontreit.com
Attachment
- PDM 6 30 21 EX 99 1 Q2 2021 EARNINGS RELEASE Financials
Source:
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