What changed in this filing

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Item 1A. Risk Factors

2024-02-07 compared with 2023-02-09 · 86 added, 93 removed, 314 unchanged (36% of the section changed)

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• changes in the national, regional, and local economic climate;

• local real estate conditions such as an oversupply of rentable space caused by increased development of new properties, a reduction in demand for rentable space caused by a change in the preferences and requirements of our tenants (including space usage), such as work-from-home practices and utilization of open workspaces or "co-working" space, or economic conditions decreasing the desirability of our locations;

• local real estate conditions such as an oversupply of rentable space caused by increased development of new properties, a reduction in demand for rentable space caused by a change in the preferences and requirements of our tenants (including space usage), such as work-from-home practices and utilization of open workspaces or "co-working" space, or local economic conditions decreasing the desirability of our locations;

• the attractiveness of our properties to tenants or buyers;

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• changes in interest rates and availability of permanent financing sources that may render the sale of a property difficult or unattractive or otherwise reduce returns to stockholders;

• supply chain disruptions, labor shortages, and increased construction costs.

Uncertain economic conditions may adversely impact current tenants in our various markets and, accordingly, could affect their ability to pay rent owed to us pursuant to their leases.

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Furthermore, our ability to sell or lease our properties at favorable rates, or at all, may be negatively impacted by general or local economic conditions.

Our ability to collect rent from tenants may affect our ability to pay for adequate maintenance, insurance, and other operating costs (including real estate taxes).

Also, the expense of owning and operating a property is not necessarily proportionally reduced when circumstances such as reduced occupancy or other market factors cause a reduction in income from the property.

Our ability to collect rent from tenants may affect our ability to pay for adequate maintenance, insurance, and other operating costs.

If a property is mortgaged and we are unable to meet the mortgage payments, the lender could foreclose on the mortgage and take title to the property.

In addition, interest rates, financing availability, law changes, and governmental regulations (including those governing usage, zoning, and taxes) may adversely affect our financial condition.

Impairment risks .

We regularly review our real estate assets for impairment;

We regularly review our real estate assets for impairment in accordance with accounting principles generally accepted in the United States ("GAAP");

and based on these reviews, we may record impairments that have an adverse effect on our results of operations.

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Leasing risk .

Our operating properties were 91.0% leased at December 31, 2022.

Our operating office properties were 90.9% leased at December 31, 2023.

Our 20 largest customers account for a meaningful portion of our revenues.

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Tenant and market concentration risk .

As of December 31, 2022, our top 20 tenants represented 37.9% of our annualized base rental revenues with no single tenant accounting for more tha n 7.3% of our annualized base rental revenues.

As of December 31, 2023, our top 20 tenants represented 37.9% of our annualized base rental revenues with our largest single tenant accounting for 8.1% of our annualized base rental revenues.

The inability or refusal of any of our significant tenants to pay rent or a decision by a significant tenant to vacate their premises prior to, or at the conclusion of, their lease term could have a significant negative impact on our results of operations or financial condition if a suitable replacement tenant is not secured in a timely manner.

For the three months ended December 31, 2022, 36.4% of our net operating income for properties owned was derived from the metropolitan Atlanta area, 31.1% was derived from the Austin area, 9.7% was derived from the Tampa area, 8.9% was derived from the Phoenix area, and 8.8% was derived from the Charlotte area.

Any adverse economic conditions impacting Atlanta, Austin, Tampa, Phoenix, or Charlotte could adversely affect our overall results of operations and financial condition.

For the three months ended December 31, 2023, 36.5% of our net operating income for properties owned was derived from the Atlanta area, 32.8% was derived from the Austin area, 9.1% was derived from the Tampa area, 8.6% was derived from the Charlotte area, and 7.6% was derived from the Phoenix area.

Any adverse economic conditions impacting Atlanta, Austin, Tampa, Charlotte, or Phoenix could adversely affect our overall results of operations and financial condition.

Uninsured losses and condemnation costs .

Accidents, earthquakes, hurricanes, floods, droughts, terrorism incidents, and other losses at our properties could adversely affect our operating results.

Casualties may occur that significantly damage an operating property or property under development, and insurance proceeds may be less than the total loss incurred by us.

Accidents, earthquakes, hurricanes, tornadoes, floods, droughts, ice storms, terrorism incidents, and other physical losses at our properties could adversely affect our operating results.

Casualties may occur that significantly damage an operating property or property under development, insurance deductibles or co-insurance limits may be significant (including with respect to damage from named wind storms), and insurance proceeds may be less than the total loss incurred by us.

Although we, or our joint venture partners where applicable, maintain casualty insurance under policies we believe to be adequate and appropriate, including rent loss insurance on operating properties, some types of losses, such as those related to the termination of longer-term leases and other contracts, generally are not insured.

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Environmental issues .

Federal, state, and local laws and regulations relating to the protection of the environment may require a current or previous owner or operator of real estate to investigate and clean up hazardous or toxic substances or petroleum product released at a property.

petroleum product released at a property.

If determined to be liable, the owner or operator may have to pay a governmental entity or third parties for property damage and for investigation and clean-up costs incurred by such parties in connection with the contamination, or perform such investigation and clean up itself.

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The physical effects of climate change could have a material adverse effect on our properties, operations, and business.

To the extent climate change causes changes in weather patterns or severity, our markets could experience increases in storm intensity (including floods, fires, tornadoes, hurricanes, or ice storms), rising sea-levels, and changes in precipitation, temperature, air quality, and quality and availability of water.

To the extent climate change causes changes in weather patterns or severity, our markets could experience increases in storm intensity (including floods, fires, tornadoes, hurricanes, droughts, or ice storms), rising sea-levels, and changes in precipitation, temperature, air quality, and quality and availability of water.

Over time, these conditions could result in physical damage to, or declining demand for, our properties or our inability to operate the buildings efficiently or at all.

Climate change may also indirectly affect our business by increasing the cost of (or making unavailable) property insurance on terms we find acceptable, increasing the cost of required resources, including energy, other fuel sources, water, and waste removal services, and increasing the risk and severity of flood, droughts, hurricanes, and earthquakes at our properties.

Climate change may also indirectly affect our business by increasing the cost of (or making unavailable) property insurance on terms we find acceptable, increasing the cost of required resources, including energy, other fuel sources, water, and waste removal services, and increasing the risk and severity of floods, fires, tornadoes, hurricanes, droughts, ice storms, and earthquakes at our properties.

Should the impact of climate change be severe or occur for lengthy periods of time, our financial condition or results of operations could be adversely impacted.

In addition, compliance with new or more stringent laws or regulations or stricter interpretations of existing laws may require material expenditure by us.

For example, various federal, state, and local laws and regulations have been implemented or are under consideration to mitigate the effects of climate change caused by

greenhouse gas emissions.

For example, various federal, state, and local laws and regulations have been implemented or are under consideration to mitigate the effects of climate change caused by greenhouse gas emissions.

Among other things, "green" building codes may seek to reduce emissions through the imposition of standards for design, construction materials, water and energy usage and efficiency, and waste management.

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Expenditures required for compliance with such codes may affect our cash flow and results of operations.

Additionally, although we pursue a robust sustainability strategy, new approaches and trends regarding building resiliency emerge from time to time in this rapidly evolving focus area.

Our approaches and priorities may differ from those of our peers, and the perception of the public or investors of these differences may adversely impact our portfolio attractiveness of our ability to lease space at competitive rates.

Joint venture structure risks .

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Our venture partners may have rights to take actions over which we have no control, or the right to withhold approval of actions that we propose, either of which could adversely affect our interests in the related joint ventures, and in some cases, our overall financial condition and results of operations.

A venture partner may have economic and/or other business interests or goals that are incompatible with our business interests or goals and that venture partner may be in a position to take action contrary to our interests.

venture partner may have economic and/or other business interests or goals that are incompatible with our business interests or goals and that venture partner may be in a position to take action contrary to our interests.

In addition, such venture partners may default on their obligations, including loans secured by property owned by the joint venture that could have an adverse impact on the financial condition and operations of the joint venture.

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Real estate investments are relatively illiquid and can be difficult to sell and convert to cash quickly.

As a result, our ability to sell one or more of our properties, whether in response to any changes in economic or other conditions or in response to a change in strategy, may be limited.

In the event we want to sell a property, we may not be able to do so in the desired time period, the sales price of the property may not meet our expectations or requirements, and/or we may be required to record an impairment on the property as a result.

As a result, our ability to sell one or more of our properties, may be limited.

Ground lease risks .

As of December 31, 2023, we had interests in eight land parcels in various markets that we lease individually on a long-term basis.

As of December 31, 2022, we had 2.0 million aggregate square feet of rental space located on these leased parcels, from which we recognized 11% of total Net Operating Income ("NOI") in the fourth quarter of 2022.

As of December 31, 2023, we had 2.0 million aggregate square feet of rental space located on these leased parcels, from which we generated 13% of our total Net Operating Income ("NOI") in the fourth quarter of 2023.

In the future, we may invest in additional properties on some of these parcels or additional parcels subject to ground leases.

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The Americans with Disabilities Act generally requires that certain buildings, including office buildings, be made accessible to disabled persons.

We are currently in compliance with these requirements.

We believe that we are currently in compliance with these requirements.

Noncompliance could result in the imposition of fines by the federal government or the award of damages to private litigants.

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Financing Risks

At certain times, interest rates and other market conditions for obtaining capital could be unfavorable, and, as a result, we may be unable to raise the capital needed to invest in acquisition or development opportunities, maintain our properties, or otherwise satisfy our commitments on a timely basis, or we may be forced to raise capital at a higher cost or under restrictive terms, which could adversely affect returns on our investments, our cash flows, and results of operations.

We generally finance our acquisition and development projects through one or more of the following:

our $1 billion senior unsecured line of credit (the "Credit Facility"), unsecured debt, non-recourse mortgages, construction loans, the sale of assets, joint venture equity, the issuance of common stock, the issuance of preferred stock, and the issuance of units of CPLP.

Each of these sources may be constrained from time to time because of market conditions, and the related cost of raising this capital may be unfavorable at any given point in time.

Each of these sources may be constrained from time to time because of market conditions, and the related cost of raising this

capital may be unfavorable at any given point in time.

These sources of capital, and the risks associated with each, include the following:

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Variable rate debt creates higher debt service requirements if market interest rates increase, which would adversely affect our cash flow and results of operations.

Our Credit Facility contains customary restrictions, requirements, and other limitations on our ability to incur indebtedness, including restrictions on unsecured debt outstanding, restrictions on secured recourse debt outstanding, and requirements to maintain a minimum fixed charge coverage ratio.

Our Credit Facility contains customary covenants, requirements, and other limitations on our ability to incur indebtedness, including covenants on unsecured debt outstanding, restrictions on secured recourse debt outstanding, and requirements to maintain a minimum fixed charge coverage ratio.

Our continued ability to borrow under our Credit Facility is subject to compliance with these covenants.

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The availability of non-recourse mortgages is dependent upon various conditions, including the willingness of mortgage lenders to lend at any given point in time.

Interest rates and loan-to-value ratios may also be volatile, and we may from time to time elect not to proceed with mortgage financing due to unfavorable terms offered by lenders.

If a property is mortgaged to secure payment of indebtedness and we are unable to make the mortgage payments, the lender may foreclose.

Further, at the time a mortgage matures, the property may be worth less than the mortgage amount and, as a result, we may determine not to refinance the mortgage and permit foreclosure, potentially generating defaults on other debt.

Interest rates and loan-to-value ratios may be volatile.

If a property is mortgaged to secure payment of indebtedness and we are unable to make the mortgage payments, the lender may foreclose, potentially generating defaults on other debt.

• Asset sales .

Real estate markets tend to experience market cycles.

Because of such cycles, the potential terms and conditions of sales, including prices, may be unfavorable for extended periods of time.

In addition, our status as a REIT can limit our ability to sell properties, which may affect our ability to liquidate an investment.

As a result, our ability to raise capital through asset sales could be limited.

Because of such cycles, the potential terms and conditions of sales, may be unfavorable for extended periods of time.

Our status as a REIT can limit our ability to sell properties.

In addition, mortgage financing on an asset may prohibit prepayment and/or impose a prepayment penalty upon the sale of that property, which may decrease the proceeds from a sale or make the sale impractical.

• Construction loans .

Construction loans generally relate to specific assets under construction and fund costs above an initial equity amount as negotiated with the lender.

Construction loans relate to specific assets under construction and fund costs above an initial equity amount as negotiated with the lender.

Terms and conditions of construction loans vary, but they generally carry a term of two to five years, charge interest at variable rates, require the lender to be satisfied with the nature and amount of construction costs prior to funding, and require the lender to be satisfied with the level of pre-leasing prior to funding.

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In addition, construction loans generally require a completion guarantee by the borrower and may require a limited payment guarantee from the Company which may be disproportionate to any guaranty required from a joint venture partner.

Uncertain economic conditions may adversely impact our construction lenders and, accordingly, impact their ability to advance loan proceeds to us as required by the construction loans.

In such event, alternative financing may be difficult or more expensive to obtain, and the progress of our development and leasing activity may be negatively impacted or delayed, as well as impacting our ability to achieve the returns we expect.

There may be times when construction loans are not available, or are only available upon unfavorable terms, which could have an adverse effect on our ability to fund development projects or on our ability to achieve the returns we expect.

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Joint ventures, including partnerships or limited liability companies, tend to be complex arrangements and there are only a limited number of parties willing to undertake such investment structures.

There is no guarantee that we will be able to undertake these ventures at the times we need capital and at favorable terms.

There is no guarantee that we will be able to undertake these ventures at the times we need capital and on favorable terms.

Our ability to exit existing joint ventures may be limited by the terms of the joint venture agreement, which may limit our ability to liquidate our investment in a joint venture.

• Common stock .

We consider public issuances of common stock to be an available source of capital for our acquisitions, development, and general corporate purposes.

We can provide no assurance that conditions will be favorable for future issuances of common stock when we need capital.

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The per share trading price of our common stock could decline as a result of the sale of shares of our common stock in the market in connection with an offering or as a result of the perception or expectation that such sales could occur.

We regularly issue common stock to key employees and our directors under our 2019 Omnibus Incentive Stock Plan.

We also issue shares of common stock to participants in our 2021 Employee Stock Purchase Plan.

• Preferred stock .

The availability of preferred stock at favorable terms and conditions is dependent upon a number of factors including the general condition of the economy, the overall interest rate environment, the condition of the capital markets, and the demand for this product by potential holders of the securities.

Issuance of preferred stock, if convertible, could be dilutive to earnings per share and have an adverse effect on the trading price of common stock.

We can provide no assurance that conditions will be favorable for future issuances of preferred stock when we need the capital, which could have an adverse effect on our ability to fund acquisition and development activities.

of preferred stock, if convertible, could be dilutive to earnings per share and have an adverse effect on the trading price of common stock.

We can provide no assurance that conditions will be favorable for future issuances of preferred stock when we need the capital.

• Operating partnership units .

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• requiring us to use a substantial portion of our cash flow from operations to service our indebtedness, which would reduce the available cash flow to fund working capital, capital expenditures, development projects, distributions, and other general corporate purposes;

• limiting our ability to obtain additional financing to fund our working capital needs, acquisitions, capital expenditures, or other debt service requirements or for other purposes;

• limiting our ability to obtain additional financing to fund our working capital needs, capital expenditures, development projects, or other debt service requirements or for other purposes;

• increasing our exposure to floating interest rates;

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• restricting the way in which we conduct our business due to financial and operating covenants in the agreements governing our existing and future indebtedness;

• exposing us to potential events of default (if not cured or waived) under covenants contained in our debt instruments;

• exposing us to potential events of default under covenants contained in our debt instruments;

• increasing our vulnerability to a downturn in general economic conditions;

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Covenants contained in our Credit Facility, senior unsecured notes, term loans, and mortgages could restrict our operational flexibility, which could adversely affect our results of operations.

Our Credit Facility, senior unsecured notes, and our unsecured term loans impose financial and operating restrictions on us.

Our Credit Facility, senior unsecured notes, and our unsecured term loans impose financial and operating covenants on us.

These restrictions may be modified from time to time, but restrictions of this type include limitations on our ability to incur debt, as well as limitations on the amount of our secured debt, unsecured debt, and on the amount of joint venture activity in which we may engage.

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If we fail to comply with these covenants, our ability to borrow may be impaired, which could potentially make it more difficult to fund our capital and operating needs.

Our failure to comply with such covenants could cause a default, and we may then be

required to repay our outstanding debt with capital from other sources.

Our failure to comply with such covenants could cause a default, and we may then be required to repay our outstanding debt with capital from other sources.

Under those circumstances, other sources of capital may not be available to us or may be available only on unattractive terms, which could materially and adversely affect our financial condition and results of operations.

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Some of our mortgages contain customary negative covenants, including limitations on our ability, without the lender’s prior consent, to further mortgage that specific property, to enter into new leases, to modify existing leases, or to redevelop or sell the property.

Compliance with these covenants and requirements could harm our operational flexibility and financial condition.

Compliance with these covenants could harm our operational flexibility and financial condition.

Our degree of leverage could limit our ability to obtain additional financing or affect the market price of our securities.

Net debt as a percentage of either total asset value or total market capitalization and net debt as a multiple of annualized EBITDA re are non-GAAP metrics often used by analysts to gauge the financial health of equity REITs like us.

If our degree of leverage is viewed unfavorably by lenders or potential joint venture partners, it could affect our ability to obtain additional financing.

In general, our degree of leverage could also make us more vulnerable to a downturn in business or the economy.

In addition, increases in our net debt to market capitalization ratio, which is in part a function of our stock price, or to other measures of asset value used by financial analysts may have an adverse effect on the market price of common stock.

Planned discontinuation of LIBOR could have an adverse impact on operations.

The London Interbank Offered Rate ("LIBOR") has been the subject of regulatory guidance and proposals for reform, and in March 2021, the United Kingdom's Financial Conduct Authority (the authority that regulates LIBOR) announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after June 30, 2023.

In December 2022, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2022-06 to defer the sunset date of FASB Accounting Standards Codification (ASC) Topic 848, Reference Rate Reform until December 31, 2024.

As of December 31, 2022, we have one loan (within our Neuhoff joint venture) with a LIBOR-based variable interest rate.

This construction loan bears interest at LIBOR plus 3.60% and matures on September 30, 2025.

The Neuhoff loan provides for alternate interest rate calculations if LIBOR is no longer widely available, including the Secured Overnight Financing Rate ("SOFR").

There can be no assurances as to what alternative interest rates may be and whether such interest rates, such as SOFR, will be more or less favorable than LIBOR and any other unforeseen impacts of the discontinuation of LIBOR.

If our degree of leverage is viewed unfavorably by common equity investors, lenders, or potential joint venture partners, it could affect our ability to obtain additional capital.

In general, our degree of leverage could also make us more vulnerable to a downturn in

business or the economy.

In addition, increases in our debt ratios may have an adverse effect on the market price of common stock.

Real Estate Acquisition and Development Risks

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• difficulty in leasing vacant space or renewing existing tenants at the acquired property;

• the costs and timing of repositioning or redeveloping acquisitions;

• the costs and timing of repositioning or redeveloping the acquired property;

• disproportionate concentrations of earnings in one or more markets;

• the acquisitions may fail to meet internal projections or otherwise fail to perform as expected;

• the acquisitions may be in markets that are unfamiliar to us and could present unforeseen business challenges;

• the timing of acquisitions may not match the timing of dispositions, leading to periods of time where proceeds are not invested as profitably as we desire or where we increase short-term borrowings until sales proceeds become available;

• the acquisitions may be in markets that are unfamiliar to us and could present unforeseen business and operating challenges;

• the timing of acquisitions may not match the timing of raising the capital necessary to fund the acquisitions;

• a change in our sustainability or resiliency profile, including an increase in key performance metrics like energy consumption intensity and greenhouse gas emissions, and/or a decrease in the percentage of our operating portfolio with key sustainability certifications;

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We face risks associated with the development of real estate.

Development activities contain certain inherent risks.

Development activities contain inherent risks.

Although we seek to minimize risks from development through various management controls and procedures, development risks cannot be eliminated.

Some of the key factors affecting development of property are as follows:

These risks may include:

• Abandoned predevelopment costs .

The development process inherently requires that a large number of opportunities be pursued with only a few actually being developed.

The development process requires a large number of opportunities be pursued with only a few actually being developed.

We may incur significant costs for predevelopment activity for projects that are ultimately abandoned, which would directly affect our results of operations.

For projects that are abandoned, we must expense certain costs, such as salaries and interest on debt, that would have otherwise been capitalized.

We have procedures and controls in place that are intended to minimize this risk, but it is likely that we will incur predevelopment expense on abandoned projects on an ongoing basis.

We have procedures and controls in place that are intended to minimize this risk, but it is likely that we will incur predevelopment costs on abandoned projects on an ongoing basis.

• Project costs .

Construction and leasing of a project involves a variety of costs that cannot always be identified at the beginning of a project.

Construction and leasing of a development project involves a variety of costs that cannot always be identified at the beginning of a project.

Costs may arise that have not been anticipated or actual costs may exceed estimated costs.

These additional costs can be significant and could adversely impact our return on a project and the expected results of operations upon completion of the project.

These additional costs can be significant and can adversely impact our return on a project and the expected results of operations upon completion of the project.

Also, construction costs vary over time based upon many factors, including the cost of labor, building materials, and compliance with applied regulations.

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• Construction delays .

Real estate development carries the risk that a project could be delayed due to a number of issues that may arise including, but not limited to, weather and other forces of nature, availability of materials, availability of skilled labor, the financial health of general contractors or sub-contractors, and the competing demands on plan-approving authorities.

Development activity carries the risk that a project could be delayed due to, but not limited to, weather and other forces of nature, availability of materials, availability of skilled labor, supply chain

disruption, the financial health of general contractors or sub-contractors, and the competing demands on plan-approving authorities.

Construction delays could cause adverse financial impacts to us which could include incurring more interest and other carrying costs than originally budgeted, monetary penalties from tenants pursuant to their leases, and higher construction costs.

Delays could also result in a violation of terms of construction loans that could increase fees, interest, or trigger additional recourse of a construction loan to us.

Delays could also result in a violation of terms of construction loans that could increase fees, interest, or trigger additional recourse of a construction loan.

• Leasing risk .

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If we developed under-performing properties, suffered sustained losses on our investments, defaulted on a significant level of loans, or experienced significant foreclosure or deed in lieu of foreclosure of our properties our reputation could be damaged.

Damage to our reputation could make it more difficult to successfully develop properties in the future and to continue to grow and expand our relationships with our lenders, joint venture partners, and tenants, which could adversely affect our business, financial condition, and results of operations.

Damage to our reputation could make it more difficult to successfully develop properties in the future and to continue to grow and expand our relationships with lenders, joint venture partners, and tenants, which could adversely affect our business, financial condition, and results of operations.

• Governmental approvals .

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• Competition .

We compete for tenants in our Sun Belt markets by highlighting our locations, rental rates, services, amenities, reputation, and the design and condition of our facilities including operational efficiencies and sustainability improvements.

We compete for tenants in our Sun Belt markets by highlighting our locations, rental rates, quality and breadth of services, amenities, reputation, and the design, condition and resiliency of our facilities including operational efficiencies and sustainability improvements.

As the competition for tenants is intense, we may be required to provide rent abatements, increase our capital improvement expenditures, incur charges for tenant improvements and other concessions, and may not be able to lease vacant space in a timely manner.

Additionally, competing properties may have vacancy rates higher than our properties, which may result in their owners being willing to lease available space at lower rates than the space in our properties.

• Risks associated with the development of mixed-use properties .

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This means that in addition to the development of office space, the project may also include space for retail, residential, or other commercial purposes.

We do not have as much experience in developing and managing non-office real estate as we do office real estate and, as a result, we may seek to develop the non-office component ourselves, sell the right to that component to a third-party developer, or we may partner with a third party who has more non-office real estate experience.

We may seek to develop the non-office component ourselves, sell the right to that component to a third-party developer, or we may partner with a third party who has more non-office real estate experience.

If we do choose to develop other components ourselves, we would be exposed not only to those risks typically associated with the development of commercial real estate generally, but also to specific risks associated with the development and ownership of non-office real estate.

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These include the risk that the other party would default on its obligations necessitating that we complete the other component ourselves, including potential financing of the project.

If we decide not to sell or participate in a joint venture and instead hire a third party manager, we would be dependent on them and their key personnel to provide services to us, and we may not find a suitable replacement if the management agreement is terminated or if key personnel leave or otherwise become unavailable to us.

If we decide to hire a third-party manager, we would be dependent on them and their key personnel to provide services to us, and we may not find a suitable replacement if the management agreement is terminated or if key personnel leave or otherwise become unavailable to us.

Federal Income Tax Risks

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A number of changes that affect noncorporate taxpayers will expire at the end of 2025 unless Congress acts to extend them.

Among other changes, the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, signed into law on March 27, 2020, makes certain changes to the TCJA.

Among other changes, the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, signed into law on March 27, 2020, makes

certain changes to the TCJA.

These changes have impacted us and our stockholders in various ways, some of which are adverse or potentially adverse compared to prior law.

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We may face risks in connection with Section 1031 Exchanges.

When possible, we dispose of and acquire properties in transactions that are intended to qualify as Section 1031 Exchanges.

When possible, we dispose of and acquire real properties in transactions that are intended to qualify as Section 1031 Exchanges.

If a transaction's gain that is intended to qualify as a Section 1031 deferral is later determined to be taxable, we may face adverse consequences, and if the laws applicable to such transactions are amended or repealed, we may not be able to dispose of properties on a tax-deferred basis.

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In addition, if a Section 1031 Exchange were later to be determined to be taxable, we may be required to amend our tax returns for the applicable year in question.

Further, as a result of changes made by the TCJA, Section 1031 Exchanges are only permitted with respect to real property.

The changes generally apply to exchanges completed after December 31, 2017, unless the property was disposed of or received in the exchange on or before such date.

If a material amount of personal property is associated with the real property that we have disposed of in a Section 1031 Exchange, these provisions will be less beneficial than under prior law.

Disclosure Controls and Internal Control over Financial Reporting Risks

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While management will continue to review the effectiveness of our disclosure controls and procedures and internal control over financial reporting, there can be no guarantee that our internal control over financial reporting will be effective in accomplishing all control objectives at all times.

Deficiencies, including any material weakness, in our internal control over financial reporting which may occur in the future could result in misstatements of our results of operations, restatements of our financial statements, a decline in our stock price, or otherwise materially adversely affect our business, reputation, results of operations, financial condition, or liquidity.

Deficiencies, including any material weakness, in our internal controls over financial reporting which may occur in the future could result in misstatements of our results of operations, restatements of our financial statements, a decline in our stock price, or otherwise materially adversely affect our business, reputation, results of operations, financial condition, or liquidity.

General Risks

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We may change our policies without obtaining the approval of our stockholders.

Our operating and financial policies, including our policies with respect to acquisitions, development and dispositions of real estate, growth, target markets, operations, indebtedness, capitalization, and dividends are exclusively determined by the Company's Board of Directors.

Our operating and financial policies, including our policies with respect to acquisitions, development, and dispositions of real estate, growth, target markets, operations, indebtedness, capitalization, and dividends are exclusively determined by

the Company's Board of Directors.

Accordingly, our stockholders do not control these policies.

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The market price of our common stock may fluctuate.

The market price of shares of our common stock have been, and may continue to be, subject to fluctuation due to many events and factors such as those described in this report including:

The market price of shares of our common stock has been, and may continue to be, subject to fluctuation in many events and factors such as those described in this report including:

• actual or anticipated variations in our operating results, funds from operations, or liquidity;

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• changes to our dividend policy;

• changes in market valuations of our properties;

• changes in the market valuations of our properties;

• adverse market reaction to the amount of our outstanding debt at any time, the amount of our maturing debt, and our ability to refinance such debt on favorable terms;

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• general market and economic conditions;

in particular, market and economic conditions of Atlanta, Austin, Tampa, Phoenix, Charlotte, Dallas, and Nashville;

in particular, market and economic conditions of Atlanta, Austin, Tampa, Charlotte, Phoenix, Dallas, and Nashville;

• the realization of any of the other risk factors described in this report.

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Securities analysts publish quarterly and annual projections of our financial performance.

These projections are developed independently based on their own analyses, and we undertake no obligation to monitor, and take no responsibility for, such projections.

These projections are developed independently based on their own analyses, and we undertake no obligation to monitor, and take no responsibility

for, such projections.

Such estimates are inherently subject to uncertainty and should not be relied upon as being indicative of the performance that we anticipate for any applicable period.

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A security breach or other significant disruption involving our IT networks and related systems could adversely impact our financial condition, results of operations, cash flows, liquidity, and the market price of our common stock and would require significant management attention and resources to remedy any resulting damages.

A security breach or other significant disruption involving our IT networks and systems could result in our inability

to maintain the building systems relied upon by our customers for their efficient use of their leased space, and the continuation of that circumstance could entitle the affected tenants to abate a portion of their rent.

A security breach or other significant disruption involving our IT networks and systems could result in our inability to maintain the building systems relied upon by our customers for their efficient use of their leased space, and the continuation of that circumstance could entitle the affected tenants to abate a portion of their rent.

Further, one or more of our tenants could experience a cyber incident which could impact their operations and ability to perform under the terms of their lease with us.

1 unchanged sentence

As cyber threats continue to evolve, we may be required to expend additional resources to continue to enhance our information security measures and to investigate and remediate any information security vulnerabilities.

Public attention to environmental, social, and governance matters.

Recently, more attention is being directed towards publicly-traded companies regarding ESG matters.

Our efforts to improve our ESG profile and practices, including reducing emissions and improving the efficiency of our building operations, may require capital expenditures and may result in short- or long-term increases in our operating costs, all of which could adversely impact our financial condition or results of operations.

Our ability to achieve our ESG goals and objectives and to accurately and transparently report our progress presents numerous operational, financial, legal, and other risks and are partially dependent on the actions of our customers and vendors.

A failure, or a perceived failure, to respond to investor, customer, employee, or other stakeholder expectations related to ESG concerns, or to comply with regulatory requirements, including a failure, or a perceived failure, to achieve any voluntarily adopted goals or initiatives, could negatively impact our reputation, ability to do business with certain partners, access to capital, stock price, and customer and employee attraction and retention.

In addition, organizations that provide information to investors on corporate governance and other matters have developed rating systems for evaluating companies on their approach to ESG.

Unfavorable ESG ratings may lead to negative investor sentiment, which could have a negative impact on our stock price.

As the nature, scope, and complexity of ESG reporting, diligence, and disclosure requirements expand, we may have to undertake additional costs to control, assess, and report on ESG metrics.

Any failure or perceived failure, whether or not valid, to pursue or fulfill our ESG goals, targets, and objectives or to satisfy various ESG reporting standards within the timelines we announce, or at all, could increase the risk of litigation.

Increased public attention to corporate responsibility matters may expose us to negative public perception, impose additional costs on our business, or impact our stock price.

Recently, more attention is being directed towards publicly-traded companies regarding Corporate Responsibility ("CR") matters.

Our efforts to improve our CR profile and practices, including reducing emissions and improving the efficiency of our building operations and the resiliency of our buildings, may require capital expenditures and may result in short- or long-term increases in our operating costs, all of which could adversely impact our financial condition or results of operations.

Our ability to achieve our CR goals and objectives and to accurately and transparently report our progress presents numerous operational, financial, legal, and other risks and are partially dependent on the actions of our customers and vendors.

A failure, or a perceived failure, to respond to investor, customer, employee, or other stakeholder expectations related to CR concerns, or to comply with regulatory requirements, including a failure, or a perceived failure, to achieve any voluntarily adopted goals or initiatives, could negatively impact our reputation, ability to do business with certain partners, access to capital, stock price, and customer and employee attraction and retention.

In addition, organizations that provide information to investors on corporate governance and other matters have developed rating systems for evaluating companies on their approach to CR.

Unfavorable CR ratings may lead to negative investor sentiment, which could have a negative impact on our stock price.

As the nature, scope, and complexity of CR reporting, diligence, and disclosure requirements expand, we may have to undertake additional costs to control, assess, and report on CR metrics.

Any failure or perceived failure, whether or not valid, to pursue or fulfill our CR goals, targets, and objectives or to satisfy various CR reporting standards within the timelines we announce, or at all, could increase the risk of litigation.

Additionally, while we strive to create and maintain an inclusive culture and a diverse workforce where everyone is valued and respected, a failure, or a perceived failure, to properly address matters of culture, including inclusivity and diversity matters, could result in reputational harm or an inability to attract and retain customers or employees.

Unresolved Staff Comments

Not applicable.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors