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Dec 31, 2022
Piedmont Q4 2022 Earnings Report
Reported fourth quarter and annual results, which included a net income of $75.6 million and Core FFO of $0.50 per diluted share.
Key Takeaways
Piedmont Office Realty Trust reported a net income of $75.6 million for the fourth quarter of 2022. The company completed 433,000 square feet of total leasing and disposed of its Cambridge, MA assets, resulting in a $102.6 million gain.
Net income applicable to Piedmont was $75.6 million, including a $101.1 million gain on sale of real estate assets.
Core FFO was $0.50 per diluted share, compared to $0.51 per diluted share for the fourth quarter of 2021.
The company completed approximately 433,000 square feet of total leasing, including 164,000 square feet of new tenant leases.
The company completed the sale of its Cambridge, MA properties, resulting in a $102.6 million gain.
Forward Guidance
Due to higher projected interest costs, the Company is introducing guidance for the year ending December 31, 2023, with core FFO per diluted share expected to be between $1.80 and $1.90.
Positive Outlook
- The Company anticipates continued growth in its Property NOI and SSNOI during the forthcoming year ending December 31, 2023.
- Executed leasing activity for 2023 is estimated to be in the range of 1.6 to 2.0 million square feet
- Year-end leased percentage anticipated to be between 87-88%, before the impacts of acquisition and disposition activity.
- 2023 guidance includes General and Administrative expenses of approximately $29 million.
- No speculative acquisitions or dispositions are included in the above guidance.
Challenges Ahead
- The largest impact on 2023 guidance is increased interest expense.
- With an over 400 bps increase in the Federal Funds Rate rates during 2022 and further increases projected during 2023
- Two new floating rate term loans priced at adjusted SOFR plus 100 and 105 bps, respectively, replacing $350 million of 10-year bonds maturing in June at an effective rate of 3.43%
Historical Earnings Impact
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