Piedmont 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 disposition of select properties, and borrowings under our $600 Million Unsecured 2022 Line of Credit as our primary sources of immediate liquidity. As of March 31, 2026, we had $526 million of borrowing capacity available under our $600 Million Unsecured 2022 Line of Credit and no required debt maturities until 2028. Consequently, we believe that we have sufficient liquidity to meet our obligations for the foreseeable future; however, as part of our overall debt management strategy, we may seek other new secured or unsecured borrowings from third-party lenders or issue other debt or equity securities as additional sources of capital. The nature and timing of these additional sources of capital will be highly dependent upon market conditions.

Current wording

We intend to use cash on hand, cash flows generated from the operation of our properties, net proceeds from the disposition of select properties, and borrowings under our $600 Million Unsecured 2022 Line of Credit as our primary sources of immediate liquidity. As of June 30, 2026, we had $16.8 million of cash on hand, the full borrowing capacity available under our $600 Million Unsecured 2022 Line of Credit and no required debt maturities until 2028. Consequently, we believe we have sufficient liquidity to meet our obligations for the foreseeable future; however, as part of our overall debt management strategy, we may seek other new secured or unsecured borrowings from third-party lenders or issue other debt or equity securities as additional sources of capital. The nature and timing of these additional sources of capital will be highly dependent upon market conditions.

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 projects. During the three months ended March 31, 2026 and 2025 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 projects. During the six months ended June 30, 2026 and 2025, we incurred the following types of capital expenditures (in thousands):

Previous wording

(1)Of the total amounts paid, approximately $2.4 million and $5.5 million relates to soft costs such as capitalized interest, payroll, and other property operating costs for the three months ended March 31, 2026 and 2025, respectively.

Current wording

(1)Of the total amounts paid, approximately $4.6 million and $10.2 million relates to soft costs such as capitalized interest, payroll, and other property operating costs for the six months ended June 30, 2026 and 2025, respectively.

Previous wording

"Capital expenditures for redevelopment/renovations" during the three months ended March 31, 2026 and 2025 related to building upgrades, primarily to the lobbies and the addition of tenant amenities at certain of our buildings and assets under redevelopment.

Current wording

"Capital expenditures for redevelopment/renovations" during the six months ended June 30, 2026 and 2025 related to building upgrades, primarily to the lobbies and the addition of tenant amenities at certain of our buildings and assets under redevelopment.

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, 2026, we committed to spend approximately $5.18 per square foot per year of lease term for tenant improvement allowances and lease commissions (net of expired lease commitments) as compared to $6.69 (net of expired lease commitments) for the three months ended March 31, 2025. As of March 31, 2026, we had no 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, 2026, we committed to spend approximately $5.54 per square foot per year of lease term for tenant improvement allowances and lease commissions (net of expired lease commitments) as compared to $6.72 (net of expired lease commitments) for the six months ended June 30, 2025. As of June 30, 2026, we had no individually significant unrecorded tenant allowance commitment greater than $10 million.

Previous wording

Although reducing outstanding debt remains our priority, subject to the identification and availability of 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. Additionally, we may use capital to repay debt when we deem it prudent to refinance or reduce various obligations.

Current wording

Although reducing outstanding debt remains our priority, subject to the identification and availability of 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. Additionally, we may use capital to repay debt when we deem it prudent to refinance or repay various obligations.

Previous wording

Finally, although we did not declare or pay dividends on our common stock during the three months ended March 31, 2026, we may also use capital resources to pay dividends to our stockholders. The amount and form of payment (cash or stock issuance) of future dividends, if any, 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 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.

Current wording

Finally, although we did not declare or pay dividends on our common stock during the six months ended June 30, 2026, we may also use capital resources to pay dividends to our stockholders. The amount and form of payment (cash or stock issuance) of future dividends, if any, 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 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, 2026 was approximately $12.9 million, or $0.10 per diluted share, as compared with net loss applicable to common stockholders of $10.1 million, or $0.08 per diluted share, for the three months ended March 31, 2025. The primary driver of the increase in net loss was higher depreciation expense as building and tenant improvements across our portfolio have been placed into service subsequent to January 1, 2025.

Current wording

Net loss applicable to common stockholders for the three months ended June 30, 2026 was approximately $11.1 million, or $0.09 per diluted share, as compared with net loss applicable to common stockholders of $16.8 million, or $0.14 per diluted share, for the three months ended June 30, 2025. The primary driver of the decrease in net loss was an approximately $7.5 million loss on early extinguishment of debt recognized during the second quarter of 2025.

Previous wording

Rental and tenant reimbursement revenue increased approximately $0.3 million for the three months ended March 31, 2026 as compared to the same period in the prior year. The increase was primarily due to the roll-up of rental rates and new leases commencing during the twelve months ended March 31, 2026. The impact of this increase was partially offset by the disposition of two projects sold subsequent to January 1, 2025.

Current wording

Rental and tenant reimbursement revenue increased approximately $3.7 million for the six months ended June 30, 2026 as compared to the same period in the prior year. The increase was primarily due to the roll-up of rental rates and new leases commencing during the twelve months ended June 30, 2026, contributing approximately $7.2 million. The impact of this increase was partially offset by the disposition of two projects subsequent to January 1, 2025.

Previous wording

Property operating costs decreased approximately $0.6 million for the three months ended March 31, 2026 as compared to the same period in the prior year. The variance was primarily due to reduced property tax expense due to lower tax assessments and successful appeals, as well as project dispositions subsequent to January 1, 2025 (as discussed above). The impact of these decreases is partially offset by an increase in other recoverable property operating costs such as utilities, repairs and maintenance, landscaping and security due to increased occupancy and utilization of our projects during the current period, as compared to the prior period.

Current wording

Property operating costs decreased approximately $0.2 million for the six months ended June 30, 2026 as compared to the same period in the prior year. The decrease was primarily due to project dispositions subsequent to January 1, 2025 (as discussed above).

Previous wording

Depreciation expense increased approximately $3.1 million for the three months ended March 31, 2026 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 January 1, 2025, which were partially offset by project dispositions during 2025.

Current wording

Depreciation expense increased approximately $7.4 million for the six months ended June 30, 2026 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 January 1, 2025, which were partially offset by project dispositions during 2025.

Previous wording

Amortization expense decreased approximately $0.1 million for the three months ended March 31, 2026 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, 2025. The decrease was largely offset by an increase in amortization expense associated with deferred lease acquisition costs associated with increased new leasing activity during the twelve months ended March 31, 2026.

Current wording

Amortization expense decreased approximately $0.4 million for the six months ended June 30, 2026 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, 2025. The decrease was largely offset by an increase in amortization expense associated with deferred lease acquisition costs associated with increased new leasing activity during the twelve months ended June 30, 2026.

Previous wording

General and administrative expense increased approximately $0.3 million for the three months ended March 31, 2026 compared to the prior year primarily reflecting increased personnel costs.

Current wording

General and administrative expense increased approximately $0.6 million for the six months ended June 30, 2026 compared to the prior year primarily reflecting increased personnel costs.

Previous wording

Gain on sale of real estate assets during the three months ended March 31, 2025 primarily consists of the gain recognized on the sale of the 161 Corporate Center project in Irving, Texas, as well as recognition of the return of amounts held in escrow for the 750 West John Carpenter project.

Current wording

Gain on sale of real estate assets during the six months ended June 30, 2025 primarily consists of the gain recognized on the sale of the 80 and 90 Central project in Boston, Massachusetts, which closed in May of 2025, as well as recognition of the return of amounts held in escrow for the 750 West John Carpenter building sold in July 2024.

Previous wording

All non-guarantor subsidiaries are separate and distinct legal entities and have no obligation, contingent or otherwise, to pay any amounts due pursuant to the Notes, or to make any funds available therefore, whether by dividends, loans, distributions or other payments.

Current wording

All non-guarantor subsidiaries are separate and distinct legal entities and have no obligation, contingent or otherwise, to pay any amounts due pursuant to the Notes, or to make any funds available therefor, whether by dividends, loans, distributions or other payments.

Previous wording

NOI increased due to new leases commencing and/or current tenants expanding at our 1155 Perimeter Center West and Galleria on the Park projects during the three months ended March 31, 2026 as compared to the same period in the prior year.

Current wording

NOI increased due to new leases commencing and/or current tenants expanding at our 1155 Perimeter Center West and Galleria on the Park projects during the six months ended June 30, 2026 as compared to the same period in the prior year.

Previous wording

NOI decreased primarily due to decreased occupancy at our Galleria Towers project, partially offset by several new tenant starts during the three months ended March 31, 2026 as compared to the same period in the prior year.

Current wording

NOI decreased primarily due to decreased occupancy at our Galleria Towers project, partially offset by several new tenant starts during the six months ended June 30, 2026 as compared to the same period in the prior year.

Previous wording

Reconciliations of net loss applicable to common stock to FFO, Core FFO, and AFFO for the three months ended March 31, 2026 and 2025 are presented below (in thousands except per share amounts):

Current wording

Reconciliations of net loss applicable to common stock to FFO, Core FFO, and AFFO for the three and six months ended June 30, 2026 and 2025 are presented below (in thousands except per share amounts):

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, 2026 and 2025, respectively, as they would reduce the loss per share presented.

Current 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 and six months ended June 30, 2026 and 2025, respectively, as they would reduce the loss per share presented.

Previous wording

(1)We calculate Earnings Before Interest, Taxes, Depreciation, and Amortization- Real Estate ("EBITDAre") in accordance with the current NAREIT definition. NAREIT currently defines EBITDAre as net income (computed in accordance with GAAP) adjusted for gains or losses from sales of property, impairment losses, depreciation on real estate assets, amortization on real estate assets, interest expense and taxes, along with the same adjustments for joint ventures, if any. Some of the adjustments mentioned can vary among owners of identical assets in similar conditions based on historical cost accounting and useful-life estimates. EBITDAre is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of our operating performance. We believe that EBITDAre is helpful to investors as a supplemental performance measure because it provides a metric for understanding our results from ongoing operations without taking into account the effects of non-cash expenses (such as depreciation and amortization) and capitalization and capital structure expenses (such as interest expense and taxes). We also believe that EBITDAre can help facilitate comparisons of operating performance between periods and with other REITs. However, other REITs may not define EBITDAre in accordance with the NAREIT definition, or may interpret the current NAREIT definition differently than us; therefore, our computation of EBITDAre may not be comparable to that of such other REITs.

Current wording

(1)We calculate Earnings Before Interest, Taxes, Depreciation, and Amortization-Real Estate ("EBITDAre") in accordance with the current NAREIT definition. NAREIT currently defines EBITDAre as net income/(loss) (computed in accordance with GAAP) adjusted for gains or losses from sales of property, impairment charges, depreciation on real estate assets, amortization on real estate assets, interest expense and taxes, along with the same adjustments for joint ventures. Some of the adjustments mentioned can vary among owners of identical assets in similar conditions based on historical cost accounting and useful-life estimates. EBITDAre is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of our operating performance. We believe that EBITDAre is helpful to investors as a supplemental performance measure because it provides a metric for understanding our results from ongoing operations without taking into account the effects of non-cash expenses (such as depreciation and amortization) and capitalization and capital structure expenses (such as interest expense and taxes). We also believe that EBITDAre can help facilitate comparisons of operating performance between periods and with other REITs. However, other REITs may not define EBITDAre in accordance with the NAREIT definition, or may interpret the current NAREIT definition differently than us; therefore, our computation of EBITDAre may not be comparable to that of such other REITs.

Previous wording

(2)We calculate Core Earnings Before Interest, Taxes, Depreciation, and Amortization ("Core EBITDA") as net income (computed in accordance with GAAP) before interest, taxes, depreciation and amortization and removing any impairment losses, gains or losses from sales of property and other significant infrequent items that create volatility within our earnings and make it difficult to determine the earnings generated by our core ongoing business. Core EBITDA is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of our operating performance. We believe that Core EBITDA is helpful to investors as a supplemental performance measure because it provides a metric for understanding the performance of our results from ongoing operations without taking into account the effects of non-cash expenses (such as depreciation and amortization), as well as items that are not part of normal day-to-day operations of our business. Other REITs may not define Core EBITDA in the same manner as us; therefore, our computation of Core EBITDA may not be comparable to that of other REITs.

Current wording

(2)We calculate Core Earnings Before Interest, Taxes, Depreciation, and Amortization ("Core EBITDA") as net income/(loss) (computed in accordance with GAAP) before interest, taxes, depreciation and amortization and incrementally removing any impairment charges, gains or losses from sales of property, loss on early extinguishment of debt, and other significant infrequent items that create volatility within our earnings and make it difficult to determine the earnings generated by our core ongoing business. Core EBITDA is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of our operating performance. We believe that Core EBITDA is helpful to investors as a supplemental performance measure because it provides a metric for understanding the performance of our results from ongoing operations without taking into account the effects of non-cash expenses (such as depreciation and amortization), as well as items that are not part of normal day-to-day operations of our business. Other REITs may not define Core EBITDA in the same manner as us; therefore, our computation of Core EBITDA may not be comparable to that of other REITs.

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, 2026 and 2025 (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, 2026 and 2025 (in thousands):

Previous wording

Our in-service portfolio was 89.3% leased as of March 31, 2026, as compared to 89.6% leased as of December 31, 2025. Scheduled lease expirations for the remainder of 2026 represent approximately 8% of our ALR. To the extent that 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 March 31, 2026, three projects, 222 South Orange Avenue in Orlando, Florida, and 9320 Excelsior Boulevard and Meridian, both in suburban Minneapolis, Minnesota, were classified as out of service as they have recently undergone redevelopment to convert from single tenant occupancy to multi-tenant occupancy. Collectively, these out of service projects were approximately 76% leased as of March 31, 2026, with the majority of those leases anticipated to commence by the end of 2026 or early 2027.

Current wording

Our in-service portfolio was 88.9% leased as of June 30, 2026, as compared to 89.6% leased as of December 31, 2025. Scheduled lease expirations for the remainder of 2026 represent approximately 8% of our ALR. To the extent that 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, 2026, two projects, 9320 Excelsior Boulevard and Meridian, both in suburban Minneapolis, Minnesota, were classified as out of service as they have recently undergone redevelopment to convert from single tenant occupancy to multi-tenant occupancy. Collectively, these out of service projects were approximately 83% leased as of June 30, 2026, with the majority of those leases anticipated to commence by the end of 2026 or early 2027.

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 may 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, 2026, we had approximately 1.0 million square feet of executed leases for vacant space that are yet to commence representing approximately $42 million of future additional annual cash rents, and approximately 0.9 million square feet of executed leases currently under rental abatement, representing approximately $26 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 may 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, 2026, we had approximately 0.9 million square feet of executed leases for vacant space that are yet to commence representing approximately $39 million of future additional annual cash rents, and approximately 1.0 million square feet of executed leases currently under rental abatement, representing approximately $28 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 discussed 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 March 31, 2026, we experienced a 11.1% and 17.8% 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 discussed 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, 2026, we experienced a 14.1% and 32.4% roll-up on a cash and accrual basis respectively, on executed leases related to space vacant one year or less.

Previous wording

During the three months ended March 31, 2026, Same Store NOI increased by 11.1% and 1.9% on a cash and accrual basis, respectively, 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.

Current wording

During the three months ended June 30, 2026, Same Store NOI increased by 9.0% and 2.8% on a cash and accrual basis, respectively, as rental rates increased and the commencement or burn off of abatements on new leases 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, 2025 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, 2026.

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, 2025 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, 2026.