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Sep 30, 2022
Piedmont Q3 2022 Earnings Report
Announced results for the quarter ended September 30, 2022.
Key Takeaways
Piedmont Office Realty Trust reported a decrease in net income applicable to Piedmont for the three months ended September 30, 2022, compared to the same period in 2021, due to increased depreciation and amortization expense and higher interest expense. However, the company achieved $0.50 of Core FFO per diluted share, consistent with the third quarter of 2021, driven by successful leasing, rental rate roll ups and asset recycling. The company also acquired 1180 Peachtree Street in Midtown Atlanta for approximately $465 million.
Net income applicable to Piedmont decreased due to higher depreciation and interest expenses.
Core FFO per diluted share remained consistent with the third quarter of 2021 due to successful leasing and asset recycling.
Same Store NOI decreased marginally due to increased leased square footage under abatement.
Acquired 1180 Peachtree Street in Midtown Atlanta for approximately $465 million.
Forward Guidance
Piedmont is narrowing its guidance for the year ending December 31, 2022, after considering year-to-date results and updated annual forecasts, including much higher interest expense resulting from rapidly rising interest rates.
Positive Outlook
- Year-end leased percentage is anticipated to be around 87%.
- Same Store NOI on a cash and accrual basis is anticipated to increase approximately 2-3% for the year.
Challenges Ahead
- Much higher interest expense resulting from rapidly rising interest rates.
- The timing of any future dispositions
- Economic, regulatory, socio-economic (including work from home), technological changes
- Impact of competition on efforts to renew existing leases or re-let space on terms similar to existing leases
- Lease terminations, lease defaults, lease contractions, or changes in the financial condition of tenants
Historical Earnings Impact
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Avg. Return Before/After Earnings
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