Q2 2024 Piedmont Office Realty Trust Inc Earnings Call Transcript
Key Points
- Piedmont Office Realty Trust Inc (PDM) completed over one million square feet of leasing, the largest quarterly volume in over a decade.
- The company achieved double-digit rental rate growth with a 15% increase in cash rents and a 23% increase in accrual-based rents.
- Same-store NOI increased approximately 6% on a cash basis and roughly 4% on an accrual basis compared to the second quarter of 2023.
- Piedmont's balance sheet was strengthened by issuing $400 million in new five-year bonds, addressing all final debt maturities until 2027.
- The company has a backlog of 1.6 million square feet of leases yet to commence, equating to over $15 million of future annualized cash rents and over $30 million of future annualized NOI.
- Core FFO per diluted share for the second quarter of 2024 was $0.37, down from $0.45 per diluted share for the second quarter of 2023.
- Increased net interest expense and decreased operating income due to the sale of one Lincoln Park and the expiration of two large leases impacted financial results.
- Leasing capital spend was slightly higher than average at over $6 per square foot per lease year, driven by several large lease renewals in Dallas.
- The company's lease percentage was down slightly quarter-over-quarter, ending the second quarter at 87.3% leased compared to 87.1% at the end of 2023.
- The gap between the reported lease percentage and the economic lease percentage is now 850 basis points, the widest it has been in over eight years, indicating a delay in cash flow realization.
Good day, and welcome to the Piedmont Office Realty Trust Incorporated Second Quarter 2024 Earnings Call. At this time, all participants are in a listen-only mode. After management's prepared remarks, there will be a question-and-answer session.
I would now like to turn the call over to your host, Laura Moon. The floor is yours.
Thank you, operator and good morning, everyone. We appreciate you joining us today for Piedmontâs second quarter 2024 earnings conference call. Last night, we filed our Form 10-Q and an 8-K that includes our earnings release and our unaudited supplemental information for the second quarter of 2024 that is available for your review on our website at piedmontreit.com under the Investor Relations section.
During this call, you will hear from senior officers at Piedmont. Their prepared remarks followed by answers to your questions will contain forward-looking statements as defined in the Private Securities Litigation
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