PDM · Piedmont Office Realty Trust, Inc.

Piedmont Office Realty Trust, Inc. reported its financial results for the first quarter of 2026, revealing a widening net loss of $12.9 million compared to a $10.1 million loss in the prior year period. Management attributed the increased loss primarily to higher depreciation expenses resulting from recently completed capital improvement projects and tenant improvements associated with new leasing activity being placed in service. Despite the GAAP net loss, operational performance demonstrated strength, with Same Store NOI on a cash basis growing 11.1% year-over-year. This growth was driven by the commencement of new leases and the burn-off of abatements, which outweighed the impact of expiring leases.

Leasing activity served as a highlight for the quarter, with the company executing over 430,000 square feet of leases. Notably, two-thirds of this activity was attributed to new tenancy, signaling healthy demand for Piedmont's Class A office properties. Management commentary emphasized a continuation of elevated demand from the latter half of 2025, with tour and proposal activity exceeding historical averages. The company also noted a robust pipeline, with over 700,000 square feet of leases either executed or in the legal stage early in the second quarter. President and CEO Brent Smith highlighted that the 'flight-to-quality' trend is enabling rent increases to record levels across the portfolio.

Financially, Core FFO per diluted share remained flat at $0.36 year-over-year, as growth in property operations was offset by the sale of assets (80/90 Central in Boxborough, MA and 161 Corporate Center in Irving, TX) during the preceding twelve months. Interest expense remained elevated, consistent with the higher interest rate environment associated with refinancing activities. Looking forward, the strong operational performance prompted the company to raise its 2026 outlook, increasing its earnings guidance by one cent and its Same Store NOI outlook by 1%. The company also received operational recognition, including a CoStar Impact Award for Galleria Towers in Dallas, reinforcing the value of its redevelopment strategies.