What changed in this filing

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Item 1. Business

2025-02-19 compared with 2024-02-20 · 26 added, 20 removed, 107 unchanged (30% of the section changed)

9 unchanged sentences

Operating Objectives and Strategy

As of December 31, 2023, we owned and operated 51 in-service office properties comprised of approximately 16.6 million square feet of primarily Class A office space which were 87.1% leased.

Additionally, we have one redevelopment asset comprising 127,000 square feet in Orlando, Florida.

As of December 31, 2024, we owned and operated a portfolio of 30 in-service projects and three redevelopment projects.

The in-service office projects total approximately 15.3 million square feet (unaudited) of primarily Class A office space and were 88.4% leased.

Collectively, approximately 70% of our ALR is generated from our properties located in our Sunbelt markets.

We lease space to a mixture of corporate tenants from multiple industries, and our average lease size is approximately 15,000 square feet with an average lease term remaining of approximately six years.

We lease space to a mixture of corporate tenants from multiple industries, and our average lease size is approximately 14,000 square feet with an average lease term remaining of six years as of December 31, 2024.

Our diversified tenant base is primarily comprised of investment grade or nationally recognized corporations or governmental agencies, with the majority of our ALR derived from such tenants.

No tenant accounts for more than 5% of our ALR and only a total of three tenants, individually, account for 3% or more of our ALR.

Only one tenant, the State of New York at our 60 Broad Street project, accounts for more than 5% of our ALR.

Headquartered in Atlanta, Georgia, with local management offices in each of our markets, Piedmont values operational excellence and is a leading participant among REITs based on the number of buildings owned and managed with Building Owners and Managers Association ("BOMA") 360 designations.

BOMA 360 is a program that evaluates a building's operations and management and benchmarks its performance against industry standards.

As of December 31, 2023, properties representing approximately 97% of our portfolio (based on square footage) had achieved such a designation, recognizing excellence in building operations and management.

As of December 31, 2024, properties representing approximately 97% of our portfolio (based on square footage) had achieved such a designation, recognizing excellence in building operations and management and counting us among the top ten companies nationwide with the most BOMA360 certified buildings.

Our focus on operational excellence, fostering long-term relationships with our high-credit quality, diverse tenant base, and maintaining our portfolio of modern, amenity-rich properties, has resulted in an approximate 64% tenant retention rate over the past five years.

In addition to operational excellence, we also focus on environmental sustainability initiatives at our properties.

During 2023, we were again named an Energy Star Partner of the Year for the third year in a row, as well as being selected as a 2022 Green Lease Leader by the Institute for Market Transformation and the U.S.

During 2024, we:

• were recognized as an ENERGY STAR® Partner of the Year for the fourth consecutive year, this year adding the prestigious “Sustained Excellence” designation;

• achieved a maximum 5 star designation and “Green Star” recognition with scores ranking in the top decile of all participating listed U.S.

companies from GRESB Real Estate Assessment;

• were selected as a 2023 Green Lease Leader by the Institute for Market Transformation and the U.S.

Department of Energy’s Better Buildings Alliance.

Approximately 70% of our portfolio (based on square footage) has achieved and maintains Leadership in Energy and Environmental Design ("LEED") certification.

Approximately 72% of our portfolio (based on square footage) has achieved and maintains Leadership in Energy and Environmental Design ("LEED") certification and 61% of our portfolio is certified LEED Gold or higher.

Our primary operating objectives are to maximize the risk-adjusted return to our stockholders by increasing cash flow from operations, by achieving sustainable growth in funds from operations, and by growing net asset value as a result of long-term capital appreciation.

2 unchanged sentences

We have recently redeveloped the majority of the properties within our portfolio to maintain and enhance the competitive positioning of our properties in their respective marketplaces.

These redevelopment projects have focused on creating additional, or enhancing existing, amenities for our tenants to increase tenant satisfaction, occupancy, and rental rates, thereby supporting our leasing efforts and improving returns on our invested capital.

These redevelopment projects have focused on creating

Index to Financial Statements

additional, or enhancing existing, amenities for our tenants to increase tenant satisfaction, occupancy, and rental rates, thereby supporting our leasing efforts and improving returns on our invested capital.

Proactive Asset and Property Management, Leasing Capabilities, and Management of Portfolio Risk

2 unchanged sentences

• maintaining local management offices in markets where we have a significant presence;

• using a "hospitality-driven" service approach intended to enhance each client's workplace experience;

• offering, or being located near, superior amenities that help our tenants attract and retain their employees;

Index to Financial Statements

• maintaining our high quality properties in an environmentally-friendly manner;

• renovating our buildings to maintain their modern appearance and superior operating condition;

• maintaining our high quality properties in an environmentally-friendly manner;

• building and cultivating our relationships with commercial real estate executives;

5 unchanged sentences

• ensuring that our tenants are credit-worthy and represent a broad spectrum of industry types with lease expirations that are laddered over many years;

• maintaining a low leverage structure, utilizing primarily unsecured financing facilities with laddered maturities;

• targeting a low leverage structure comprised of primarily unsecured financing facilities with laddered maturities;

• structuring lease expirations to avoid having multiple leases expire in the same market in a relatively short period of time;

23 unchanged sentences

Financing Strategy

We employ a conservative leverage strategy by targeting a debt-to-gross assets ratio of between 30% to 40%, and debt to EBITDA ratio of mid 6x or below.

We employ a conservative leverage strategy by targeting a debt-to-gross assets ratio of between 30% to 40%, and net debt to EBITDA ratio of mid 6x or below.

To effectively manage our long-term leverage strategy, we continue to analyze various sources of debt capital to prudently ladder debt maturities and to determine which sources will be the most beneficial to our investment strategy at any particular time.

5 unchanged sentences

Approximately two-thirds of our workforce are salaried, with the remainder compensated on an hourly basis.

Training programs for our employees, managers, and contractors during 2023 included professional training on workplace harassment and cybersecurity.

In addition, employees and managers received diversity, conflict management, collaboration, ethics, and safety training.

Training programs for our employees, managers, and contractors during 2024 included professional training on workplace harassment, artificial intelligence, and cybersecurity.

In addition, employees and managers received performance management, conflict management, customer service, ethics, and safety training.

We intend to provide an environment that is equitable, unbiased, pleasant, diverse, healthy, comfortable, and free from intimidation, hostilities, or other offenses that might interfere with work performance.

8 unchanged sentences

The information contained on our website is not incorporated herein by reference.

We compete for tenants for our high-quality assets by fostering strong tenant relationships and by providing quality customer service including:

We compete for tenants for our high-quality assets by fostering strong tenant relationships through a hospitality-driven approach to customer services including:

leasing, asset management, property management, and construction management services.

In each market where we operate, we also face significant competition for attractive investment opportunities from a large number of other real estate investors, including investors with significant capital resources such as domestic and foreign corporations and financial institutions, other publicly traded and privately held REITs, private institutional investment funds, investment banking firms, life insurance companies and pension funds.

We do not face, however, the same competitors in every market.

This competition,

Index to Financial Statements

along with market-specific vacancy rates and the condition of available, leasable square footage, affects the rental rates and concessions that we negotiate with our tenants.

corporations and financial institutions, other publicly traded and privately held REITs, private institutional investment funds, investment banking firms, life insurance companies and pension funds.

We do not face, however, the same competitors in every market.

This competition, along with market-specific vacancy rates and the condition of available, leasable square footage, affects the rental rates and concessions that we negotiate with our tenants.

Our competitors, along with these other market factors, also influence the price we pay to acquire properties, and the proceeds we receive when we dispose of a building.

19 unchanged sentences

The inability of a tenant to pay future rental amounts would have a negative impact on our results of operations.

As of December 31, 2023, our tenants come from broadly diversified industry sectors and no individual tenant represented more than 5% of our ALR.

As of December 31, 2024, our tenants come from broadly diversified industry sectors and only one tenant, the State of New York at our 60 Broad Street project, represented more than 5% of our ALR.

Other Matters

7 unchanged sentences

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 1. Business