Piedmont Office Realty Trust Inc

Previous wording

We intend to use cash on hand, cash flows generated from the operation of our properties, net proceeds from the potential disposition of select properties, and borrowings under our $600 Million Unsecured 2022 Line of Credit as our primary sources of immediate liquidity. Our next scheduled debt maturities are the remaining $25 million of our $215 Million Unsecured 2023 Term Loan and our $250 Million Unsecured 2018 Term Loan due during the first quarter of 2025. We currently anticipate repaying these amounts using any, or a combination of, the following: our $600 Million Unsecured 2022 Line of Credit, net proceeds from the disposition of select properties, and other new secured or unsecured borrowings from third party lenders or the public debt market. The nature and timing of any additional sources of capital will be highly dependent on market conditions. We believe that we have sufficient liquidity to meet our obligations for the foreseeable future.

Current wording

We intend to use cash on hand, cash flows generated from the operation of our properties, net proceeds from the potential disposition of select properties, and borrowings under our $600 Million Unsecured 2022 Line of Credit as our primary sources of immediate liquidity, including to repay the $250 million Unsecured 2018 Term Loan which is scheduled to mature in March of 2025. Other than the $250 million Unsecured 2018 Term Loan, we currently have no other final debt maturities until 2027. We believe that we have sufficient liquidity to meet our obligations for the foreseeable future.

Previous wording

Our most consistent use of capital has historically been, and we believe will continue to be, to fund capital expenditures for our existing portfolio of properties. During the three months ended March 31, 2024 and 2023 we incurred the following types of capital expenditures (in thousands):

Current wording

Our most consistent use of capital has historically been, and we believe will continue to be, to fund capital expenditures for our existing portfolio of properties. During the six months ended June 30, 2024 and 2023 we incurred the following types of capital expenditures (in thousands):

Previous wording

(1)Of the total amounts paid, approximately $4.0 million and $2.0 million relates to soft costs such as capitalized interest, payroll, and other property operating costs for the three months ended March 31, 2024 and 2023, respectively.

Current wording

(1)Of the total amounts paid, approximately $8.2 million and $4.4 million relates to soft costs such as capitalized interest, payroll, and other property operating costs for the six months ended June 30, 2024 and 2023, respectively.

Previous wording

"Capital expenditures for redevelopment/renovations" during both the three months ended March 31, 2024 and 2023 related to building upgrades, primarily to the lobbies and the addition of tenant amenities at certain of our buildings, including: 60 Broad Street in New York City; Galleria Towers in Dallas, Texas; 222 South Orange Avenue in Orlando, Florida; and Galleria on the Park and 999 Peachtree Street in Atlanta, Georgia, among others, most of which are anticipated to be completed during 2024.

Current wording

"Capital expenditures for redevelopment/renovations" during both the six months ended June 30, 2024 and 2023 related to building upgrades, primarily to the lobbies and the addition of tenant amenities at certain of our buildings, including: Galleria Towers in Dallas, Texas; The Exchange in Orlando, Florida; 999 Peachtree Street in Atlanta, Georgia, and 9320 Excelsior Boulevard and One and Two Meridian in suburban Minneapolis, Minnesota, among others, most of which are anticipated to be completed during 2024.

Previous wording

Given that our operating model frequently results in leases for multiple blocks of space to credit-worthy tenants, our leasing success can result in capital outlays which vary from one reporting period to another based upon the specific leases executed. For leases executed during the three months ended March 31, 2024, we committed to spend approximately $5.13 per square foot per year of lease term for tenant improvement allowances and lease commissions (net of expired lease commitments) as compared to $6.18 (net of expired lease commitments) for the three months ended March 31, 2023. As of March 31, 2024, we had one individually significant unrecorded tenant allowance commitment greater than $10 million.

Current wording

Given that our operating model frequently results in leases for multiple blocks of space to credit-worthy tenants, our leasing success can result in capital outlays which vary from one reporting period to another based upon the specific leases executed. For leases executed during the six months ended June 30, 2024, we committed to spend approximately $5.85 per square foot per year of lease term for tenant improvement allowances and lease commissions (net of expired lease commitments) as compared to $6.29 (net of expired lease commitments) for the six months ended June 30, 2023. As of June 30, 2024, we had two individually significant unrecorded tenant allowances commitment greater than $10 million.

Previous wording

Although repayment of debt is currently our priority, subject to the identification and availability of a few, select investment opportunities and our ability to consummate such acquisitions on satisfactory terms, acquiring new assets consistent with our investment strategy could also be a significant use of capital.

Current wording

Although reducing outstanding debt remains our priority, subject to the identification and availability of a few, select investment opportunities and our ability to consummate such acquisitions on satisfactory terms, acquiring new assets consistent with our investment strategy could also be a significant use of capital.

Previous wording

We also use capital resources to pay dividends to our stockholders. The amount and form of payment (cash or stock issuance) of future dividends to be paid to our stockholders will continue to be largely dependent upon (i) the amount of cash generated from our operating activities; (ii) our expectations of future cash flows; (iii) our determination of near-term cash needs for debt repayments, development projects, and selective acquisitions of new properties; (iv) the timing of significant expenditures for tenant improvements, leasing commissions, building redevelopment projects, and general property capital improvements; (v) long-term dividend payout ratios for comparable companies; (vi) our ability to continue to access additional sources of capital, including potential sales of our properties; and (vii) the amount required to be distributed to maintain our status as a REIT. With the fluctuating nature of cash flows and expenditures, we may periodically borrow funds on a short-term basis to cover timing differences in cash receipts and cash disbursements, including to pay dividends to our stockholders.

Current wording

We also use capital resources to pay dividends to our stockholders. The amount and form of payment (cash or stock issuance) of future dividends to be paid to our stockholders will continue to be largely dependent upon (i) the amount of cash generated from our operating activities; (ii) our expectations of future cash flows; (iii) our determination of near-term cash needs for debt repayments, development projects, and selective acquisitions of new properties; (iv) the timing of significant expenditures for tenant improvements, leasing commissions, building redevelopment projects, and general property capital improvements; (v) long-term dividend payout ratios for comparable companies; (vi) our ability to continue to access additional sources of capital, including potential sales of our properties; (vii) our desire to reduce overall leverage; and (viii) the amount required to be distributed to maintain our status as a REIT. With the fluctuating nature of cash flows and expenditures, we may periodically borrow funds on a short-term basis to cover timing differences in cash receipts and cash disbursements, including to pay dividends to our stockholders.

Previous wording

Net loss applicable to common stockholders for the three months ended March 31, 2024 was approximately $27.8 million, or $0.22 per share, as compared with net loss applicable to common stockholders of $1.4 million, or $0.01 per share, for the three months ended March 31, 2023, with the first quarter of 2024 including an $18.4 million impairment charge ($0.15 per share) primarily related to shortening the projected hold period for one property during the quarter, as well as approximately $7.6 million, or $0.06 per share, of increased interest expense as compared to first quarter of 2023.

Current wording

Net loss applicable to common stockholders for the three months ended June 30, 2024 was approximately $9.8 million, or $0.08 per diluted share, as compared with net loss applicable to common stockholders of $2.0 million, or $0.02 per diluted share, for the three months ended June 30, 2023. The increase in net loss mainly reflects a $7.5 million increase in interest expense, net of interest income, driven by increased interest rates on our debt during the second quarter of 2024 as compared to the second quarter of 2023.

Previous wording

The following table sets forth selected data from our consolidated statements of operations for the three months ended March 31, 2024 and 2023, respectively, as well as each balance as a percentage of total revenues for the same period presented (dollars in millions):

Current wording

The following table sets forth selected data from our consolidated statements of operations for the three months ended June 30, 2024 and 2023, respectively, as well as each balance as a percentage of total revenues for the same periods presented (dollars in millions):

Previous wording

Other property related income increased approximately $0.3 million for the three months ended March 31, 2024 as compared to the same period in the prior year primarily due to higher transient parking at our buildings during the current period, as compared to the prior period.

Current wording

Other property related income increased approximately $1.0 million for the three months ended June 30, 2024 as compared to the same period in the prior year primarily due to higher transient parking at our office projects during the current period, as compared to the prior period.

Previous wording

Depreciation expense increased approximately $3.1 million for the three months ended March 31, 2024 as compared to the same period in the prior year. The increase was primarily due to additional building and tenant improvements acquired and/or placed in service subsequent to January 1, 2023.

Current wording

Depreciation expense increased approximately $2.3 million for the three months ended June 30, 2024 as compared to the same period in the prior year. The increase was primarily due to additional building and tenant improvements placed in service subsequent to April 1, 2023.

Previous wording

Interest expense increased approximately $7.6 million for the three months ended March 31, 2024 as compared to the same period in the prior year primarily driven by increased interest rates on floating-rate debt during the twelve months ended March 31, 2024 as well as the refinancing of maturing debt at higher rates during the latter half of 2023 and first quarter of 2024.

Current wording

Interest expense increased approximately $6.2 million for the three months ended June 30, 2024, as compared to the same period in the prior year primarily driven by increased interest rates on floating-rate debt during the twelve months ended June 30, 2024 as well as the refinancing of maturing debt at higher rates during the latter half of 2023 and first half of 2024. The increase was partially offset by a $1.6 million increase in capitalized interest associated with various redevelopment projects in progress during the three months ended June 30, 2024.

Previous wording

Other income decreased approximately $1.4 million for the three months ended March 31, 2024 as compared to the same period in the prior year due to lower average invested cash balances during the first quarter of 2024 as compared to the first quarter of 2023.

Current wording

Other income decreased approximately $1.5 million for the three months ended June 30, 2024 as compared to the same period in the prior year due to lower average invested cash balances during the second quarter of 2024 as compared to the second quarter of 2023.

Previous wording

Rental and tenant reimbursement revenue increased approximately $2.3 million for the three months ended March 31, 2024 as compared to the same period in the prior year. The increase was primarily due to the roll up of rental rates, lease commencements, and higher tenant reimbursements as a result of increased recoverable operating expenses during the current period as tenant utilization and the overall leased percentage of our portfolio increased during the twelve months ended March 31, 2024.

Current wording

Rental and tenant reimbursement revenue increased approximately $1.5 million for the six months ended June 30, 2024 as compared to the same period in the prior year. The increase was primarily due to the roll up of rental rates, lease commencements, and higher tenant reimbursements as a result of increased recoverable operating expenses during the current period as tenant utilization increased during the twelve months ended June 30, 2024, offset partially by two large lease expirations and the disposition of our One Lincoln Park asset.

Previous wording

Property operating costs increased approximately $1.7 million for the three months ended March 31, 2024 as compared to the same period in the prior year. The variance was primarily due to higher recoverable operating expenses such as janitorial, security, repairs and maintenance and other general expenses as tenant utilization and the overall leased percentage of our portfolio increased during the twelve months ended March 31, 2024.

Current wording

Property operating costs increased approximately $1.9 million for the six months ended June 30, 2024 as compared to the same period in the prior year. The variance was primarily due to higher recoverable operating expenses such as janitorial, security, repairs and maintenance and other general expenses as tenant utilization increased during the twelve months ended June 30, 2024. These increased costs were partially offset by a decrease in property operating expenses associated with the sale of One Lincoln Park in March 2024.

Previous wording

Amortization expense decreased approximately $3.9 million for the three months ended March 31, 2024 as compared to the same period in the prior year. The decrease in amortization expense associated with certain lease intangible assets at our existing properties becoming fully amortized subsequent to January 1, 2023.

Current wording

Amortization expense decreased approximately $7.2 million for the six months ended June 30, 2024 as compared to the same period in the prior year. The decrease in amortization expense is associated with certain lease intangible assets at our existing projects becoming fully amortized subsequent to January 1, 2023.

Previous wording

During the three months ended March 31, 2024, we recognized a non-cash impairment charge of approximately $18.4 million primarily related to shortening the projected hold period for one property during the quarter. See Note 6 to our accompanying consolidated financial statements for further details.

Current wording

During the six months ended June 30, 2024, we recognized a non-cash impairment charge of approximately $18.4 million primarily related to shortening the projected hold period for one property during the quarter. See Note 6 to our accompanying consolidated financial statements for further details.

Previous wording

The $0.4 million loss on early extinguishment of debt for the three months ended March 31, 2024 is comprised of the pro-rata write-off of unamortized debt issuance costs and discounts associated with the early payoff of the $100 million remaining balance on the $200 Million Unsecured 2022 Term Loan Facility which was scheduled to mature in December 2024.

Current wording

The $0.4 million loss on early extinguishment of debt for the six months ended June 30, 2024 is comprised of the pro-rata write-off of unamortized debt issuance costs and discounts associated with the early payoff of the $100 million remaining balance on the $200 Million Unsecured 2022 Term Loan Facility which was scheduled to mature in December 2024.

Previous wording

As of March 31, 2024, Piedmont, through its wholly-owned subsidiary Piedmont OP, had three separate issuances totaling approximately $1.2 billion of senior unsecured notes payable outstanding that mature in 2028, 2030 and 2032 (see Note 3 to our accompanying consolidated financial statements for additional details regarding each of these issuances) (collectively, the "Notes"). The Notes are senior unsecured obligations of Piedmont OP, rank equally in right of payment with all of Piedmont OP's other existing and future senior unsecured indebtedness, and would be effectively subordinated in right of payment to any of Piedmont OP’s future mortgage or other secured indebtedness (to the extent of the value of the collateral securing such indebtedness) and to all existing and future indebtedness and other liabilities of Piedmont OP’s subsidiaries, whether secured or unsecured.

Current wording

As of June 30, 2024, Piedmont, through its wholly-owned subsidiary Piedmont OP, had four separate issuances totaling approximately $1.6 billion of senior unsecured notes payable outstanding that mature in 2028, 2029, 2030 and 2032 (see Note 3 to our accompanying consolidated financial statements for additional details regarding each of these issuances) (collectively, the "Notes"). The Notes are senior unsecured obligations of Piedmont OP, rank equally in right of payment with all of Piedmont OP's other existing and future senior unsecured indebtedness, and would be effectively subordinated in right of payment to any of Piedmont OP’s future mortgage or other secured indebtedness (to the extent of the value of the collateral securing such indebtedness) and to all existing and future indebtedness and other liabilities of Piedmont OP’s subsidiaries, whether secured or unsecured.

Previous wording

Our President and Chief Executive Officer is our chief operating decision maker ("CODM"), who evaluates our portfolio and assesses the ongoing operations and performance of our properties utilizing the following geographic segments: Atlanta, Dallas, Orlando, Northern Virginia/Washington, D.C., Minneapolis, New York, and Boston. These operating segments are also our reportable segments. Additionally, as of March 31, 2024, we owned two properties in Houston that did not meet the definition of an operating or reportable segment as the CODM does not regularly review these properties for purposes of allocating resources or assessing performance, and we do not maintain a significant presence or anticipate further investment in this market. These two properties are included in "Other" below. See Note 12 to the accompanying consolidated financial statements for additional information and a reconciliation of Net income/(loss) applicable to Piedmont to Net Operating Income ("NOI").

Current wording

Our President and Chief Executive Officer is our chief operating decision maker ("CODM"), who evaluates our portfolio and assesses the ongoing operations and performance of our projects utilizing the following geographic segments: Atlanta, Dallas, Orlando, Northern Virginia/Washington, D.C., Minneapolis, New York, and Boston. These operating segments are also our reportable segments. Additionally, as of June 30, 2024, we owned two properties in Houston that did not meet the definition of an operating or reportable segment as the CODM does not regularly review these properties for purposes of allocating resources or assessing performance, and we do not maintain a significant presence or anticipate further investment in this market. These two properties are included in "Other" below. See Note 12 to the accompanying consolidated financial statements for additional information and a reconciliation of Net income/(loss) applicable to Piedmont to Net Operating Income ("NOI").

Previous wording

NOI increased due to several leases commencing at our Galleria on the Park project during the three months ended March 31, 2024 as compared to the same period in the prior year.

Current wording

NOI increased due to several leases commencing at our Galleria on the Park project during the six months ended June 30, 2024 as compared to the same period in the prior year.

Previous wording

NOI decreased primarily due to the expiration of the lease associated with the sole tenant at 9320 Excelsior Boulevard, and the property's designation as a redevelopment asset during the first quarter of 2024.

Current wording

NOI decreased primarily due to the expiration of the leases associated with the sole tenants at two projects: 9320 Excelsior Boulevard, and One and Two Meridian. Both projects have been designated as redevelopment assets during the first half of 2024.

Previous wording

NOI increased due to Microsoft's expansion at our 5 & 15 Wayside Road building as compared to the same quarterly period in the prior year.

Current wording

NOI increased due to a tenant's expansion at our 5 & 15 Wayside Road building in the latter half of 2023 as compared to the first six months of the prior year.

Previous wording

(1)We define non-incremental capital expenditures as capital expenditures of a recurring nature related to tenant improvements, leasing commissions, and building capital that do not incrementally enhance the underlying assets' income generating capacity. Tenant improvements, leasing commissions, building capital and deferred lease incentives incurred to lease space that was vacant at acquisition, leasing costs for spaces vacant for greater than one year, leasing costs for spaces at newly acquired properties for which in-place leases expire shortly after acquisition, improvements associated with the expansion of a building, and renovations that either enhance the rental rates of a building or change the property's underlying classification, such as from a Class B to a Class A property, are excluded from this measure.

Current wording

(2)We define non-incremental capital expenditures as capital expenditures of a recurring nature related to tenant improvements, leasing commissions, and building capital that do not incrementally enhance the underlying assets' income generating capacity. Tenant improvements, leasing commissions, building capital and deferred lease incentives incurred to lease space that was vacant at acquisition, leasing costs for spaces vacant for greater than one year, leasing costs for spaces at newly acquired properties for which in-place leases expire shortly after acquisition, improvements associated with the expansion of a building, and renovations that either enhance the rental rates of a building or change the property's underlying classification, such as from a Class B to a Class A property, are excluded from this measure.

Previous wording

(2)Includes potential dilution under the treasury stock method that would occur if our remaining unvested and potential stock awards vested and resulted in additional common shares outstanding. Such shares are not included when calculating net loss per share applicable to Piedmont for the three months ended March 31, 2024 and 2023, respectively, as they would reduce the loss per share presented.

Current wording

(3)Includes potential dilution under the treasury stock method that would occur if our remaining unvested and potential stock awards vested and resulted in additional common shares outstanding. Such shares are not included when calculating net loss per share applicable to Piedmont for the three and six months ended June 30, 2024 and 2023, respectively, as they would reduce the loss per share presented.

Previous wording

(5)Other investments include properties out of service for redevelopment or development projects, land, and recently completed redevelopment and development projects for which some portion of operating expenses were capitalized during the current and/or prior year reporting periods. The operating results from 222 South Orange Avenue in Orlando, Florida, and 9320 Excelsior Boulevard in suburban Minneapolis, Minnesota are included in this line item.

Current wording

(5)Other investments include active or recently completed out-of-service redevelopment projects and land. The operating results from a portion of The Exchange in Orlando, Florida, as well as One and Two Meridian and 9320 Excelsior Boulevard in suburban Minneapolis, Minnesota are included in this line item.

Previous wording

The following table sets forth a reconciliation of net loss calculated in accordance with GAAP to EBITDAre, Core EBITDA, Property NOI, and Same Store NOI, on both a cash and accrual basis, for the three months ended March 31, 2024 and 2023 (in thousands):

Current wording

The following table sets forth a reconciliation of net loss calculated in accordance with GAAP to EBITDAre, Core EBITDA, Property NOI, and Same Store NOI, on both a cash and accrual basis, for the six months ended June 30, 2024 and 2023 (in thousands):

Previous wording

Our portfolio consists of office properties located within identified growth submarkets in large metropolitan cities concentrated primarily in the Sunbelt. We typically lease space to creditworthy corporate or governmental tenants on a long-term basis. As of March 31, 2024, our average lease was approximately 15,000 square feet with approximately six years of lease term remaining. Leased percentage, as well as rent roll ups and roll downs, which we experience as a result of re-leasing, can fluctuate widely between buildings and between tenants, depending on when a particular lease is scheduled to commence or expire.

Current wording

Our portfolio consists of office projects located within identified growth submarkets in large metropolitan cities concentrated primarily in the Sunbelt. We typically lease space to creditworthy corporate or governmental tenants on a long-term basis. As of June 30, 2024, our average lease was approximately 14,000 square feet with over six years of lease term remaining. Leased percentage, as well as rent roll ups and roll downs, which we experience as a result of re-leasing, can fluctuate widely between buildings and between tenants, depending on when a particular lease is scheduled to commence or expire.

Previous wording

The leased percentage of our portfolio increased to 87.8% leased as of March 31, 2024, as compared to 87.1% leased as of December 31, 2023. During the three months ended March 31, 2024, we completed approximately 500,000 square feet of leasing, including approximately 328,000 of new tenant leases which increased our leased percentage. Scheduled lease expirations for the portfolio for the rest of 2024 represent approximately 7.3% of our ALR, some portion of which may renew. To the extent the square footage from new leases for currently vacant space exceeds or falls short of the square footage associated with non-renewing expirations, such leases would increase or decrease our overall leased percentage, respectively. Both the sale of One Lincoln Park building (mentioned above) and the designation of 9320 Excelsior Boulevard (also mentioned above) as a redevelopment asset impacted our leased percentage as of March 31, 2024.

Current wording

The leased percentage of our in-service portfolio increased slightly to 87.3% leased as of June 30, 2024, as compared to 87.1% leased as of December 31, 2023. During the six months ended June 30, 2024, we completed over 1.5 million square feet of leasing, including approximately 730,000 square feet of new tenant leases which increased our in-service leased percentage, despite the sale of the One Lincoln Park building during the first quarter of 2024. Scheduled lease expirations for the portfolio for the rest of 2024 are low, representing approximately 3.4% of our ALR, some portion of which may renew. To the extent the square footage from new leases for currently vacant space in our in-service portfolio exceeds or falls short of the square footage associated with non-renewing expirations, such leases would increase or decrease our in-service leased percentage, respectively. As of June 30, 2024, three projects, 222 South Orange Avenue in Orlando, Florida, and 9320 Excelsior Boulevard and One and Two Meridian, both in suburban Minneapolis, Minnesota, were classified as out of service as they undergo redevelopment.

Previous wording

Commencement of a lease associated with a new tenant typically occurs 6-18 months after the lease execution date, after refurbishment of the space is completed. The downtime between a lease expiration and the new lease's commencement can negatively impact Property NOI and Same Store NOI comparisons (both accrual and cash basis). In addition, office leases for both new and renewing tenants often contain upfront rental and/or operating expense abatement periods which delay the cash flow benefits of the lease even after the new or renewed lease has commenced, negatively impacting Property NOI and Same Store NOI on a cash basis until such abatements expire. As of March 31, 2024, we had approximately 1.3 million square feet of executed leases for vacant space yet to commence or under rental abatement, representing approximately $42 million of future additional annual cash rents.

Current wording

Commencement of a lease associated with a new tenant typically occurs 6-18 months after the lease execution date, after refurbishment of the space is completed. The downtime between a lease expiration and the new lease's commencement can negatively impact Property NOI and Same Store NOI comparisons (both accrual and cash basis). In addition, office leases for both new and renewing tenants often contain upfront rental and/or operating expense abatement periods which delay the cash flow benefits of the lease even after the new or renewed lease has commenced, negatively impacting Property NOI and Same Store NOI on a cash basis until such abatements expire. As of June 30, 2024, we had approximately 1.6 million square feet of executed leases for vacant space yet to commence or under rental abatement, representing approximately $51 million of future additional annual cash rents.

Previous wording

If we are unable to replace expiring leases with new or renewal leases at rental rates equal to or greater than the expiring rates, rental rate roll downs could occur and negatively impact Property NOI and Same Store NOI comparisons. As mentioned above, our diverse portfolio and the magnitude of some of our tenants' leased spaces can result in rent roll ups and roll downs that can fluctuate widely on a building-by-building and a quarter-to-quarter basis. During the three months ended March 31, 2024, we experienced an 8.0% and 18.6% roll up in cash and accrual rents, respectively, on executed leases related to space vacant one year or less.

Current wording

If we are unable to replace expiring leases with new or renewal leases at rental rates equal to or greater than the expiring rates, rental rate roll downs could occur and negatively impact Property NOI and Same Store NOI comparisons. As mentioned above, our diverse portfolio and the magnitude of some of our tenants' leased spaces can result in rent roll ups and roll downs that can fluctuate widely on a project-by-project and a quarter-to-quarter basis. During the three months ended June 30, 2024, we experienced an 15.2% and 23.0% roll up in cash and accrual rents, respectively, on executed leases related to space vacant one year or less.

Previous wording

During the three months ended March 31, 2024, Same Store NOI increased by 5.1% and 2.1% on a cash and accrual basis, respectively, as compared to the same period in the prior year primarily due to rental rate roll-ups, as well as new leases commencing or leases with expiring rental or operating expense abatements beginning to outweigh leases that expired subsequent to April 1, 2023. Same Store NOI comparisons for any given period fluctuate as a result of the mix of net leasing activity in individual properties during the respective period.

Current wording

During the three months ended June 30, 2024, Same Store NOI increased by 5.7% and 3.7% on a cash and accrual basis, respectively, as compared to the same period in the prior year, as newly commenced leases or those with expiring abatements outweighed expiring leases. Same Store NOI comparisons for any given period fluctuate as a result of the mix of net leasing activity in individual properties during the respective period.

Previous wording

Our accounting policies have been established to conform with GAAP. The preparation of financial statements in conformity with GAAP requires management to use judgment in the application of accounting policies, including making estimates and assumptions. These judgments affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. If our judgment or interpretation of the facts and circumstances relating to various transactions had been different, it is possible that different accounting policies would have been applied, thus, resulting in a different presentation of the financial statements. Additionally, other companies may utilize different estimates that may impact comparability of our results of operations to those of companies in similar businesses. Refer to our Annual Report on Form 10-K for the year ended December 31, 2023 for a discussion of our critical accounting policies and estimates. There have been no material changes to these policies during the three months ended March 31, 2024.

Current wording

Our accounting policies have been established to conform with GAAP. The preparation of financial statements in conformity with GAAP requires management to use judgment in the application of accounting policies, including making estimates and assumptions. These judgments affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. If our judgment or interpretation of the facts and circumstances relating to various transactions had been different, it is possible that different accounting policies would have been applied, thus, resulting in a different presentation of the financial statements. Additionally, other companies may utilize different estimates that may impact comparability of our results of operations to those of companies in similar businesses. Refer to our Annual Report on Form 10-K for the year ended December 31, 2023 for a discussion of our critical accounting policies and estimates. There have been no material changes to these policies during the six months ended June 30, 2024.