Executive Summary

Leasing-driven quarter: 724K sf executed (+75% new leases), leased percentage rose to 89.2%; Core FFO/share $0.35 vs $0.36 LY; cash Same-Store NOI turned positive (+2.8%) as abatements burn off .
Estimates vs actuals: Revenue essentially in line ($139.16M vs $139.23M cons), GAAP EPS missed (-$0.11 vs -$0.05 cons); management said Core FFO beat consensus by ~3% (not disclosed by S&P feed) .
Guidance narrowed: 2025 Core FFO/share raised at the low end and narrowed to $1.40–$1.42 (prior $1.38–$1.44); leasing guidance maintained at 2.2–2.4M sf; interest expense outlook unchanged at $127–$129M .
2026–2027 earnings catalysts: ~$40M annual cash rent from uncommenced leases and ~~$35.7M from current abatements set to cash-flow mostly in 2026; CFO highlighted potential 400 bps refinancing spread on 9.25% notes (~~$21M / ~$0.17 FFO/share accretion) .

What Went Well and What Went Wrong

What Went Well
- Record leasing momentum: 724K sf total, 551K sf new (largest new-tenant quarter in a decade), cash/accrual rent roll-ups +8.6%/+20.2%; leased percentage to 89.2% (+50 bps q/q) .
- Same-Store NOI inflected on cash basis: +2.8% cash and +3.2% accrual; management expects continued improvement as abatements expire .
- Balance sheet runway and cost-of-debt tweak: no maturities until 2028; amended revolver/term loan to remove SOFR credit spread adjustment (-10 bps all-in rate) .
- Management quote: “Our portfolio of recently renovated, well-located, hospitality-inspired Piedmont PLACEs continues to set the standard... driving leasing volumes and rental rates to all-time highs.” .
What Went Wrong
- GAAP profitability: Net loss widened y/y to -$13.5M; GAAP EPS -$0.11 vs -$0.09 LY on elevated interest expense from prior refinancings .
- Core FFO/share modestly lower: $0.35 vs $0.36 LY, reflecting asset sales and higher net interest expense; leasing benefits weighted to 2026 .
- NYC lease timing slipped into early 2026; management remains confident but flagged live-process complexity; holdover risk mitigated by $8M annual penalty if delayed .

Financial Results

Metric	Q3 2024	Q2 2025	Q3 2025
Total Revenues ($USD ‘000)	$139,293	$140,292	$139,163
Net Income (Loss) ($USD ‘000)	$(11,519)	$(16,808)	$(13,462)
Net Income (Loss) per Share - Diluted ($)	$(0.09)	$(0.14)	$(0.11)
Core FFO per Share - Diluted ($)	$0.36	$0.36	$0.35
Same-Store NOI Growth (Cash) (%)	-0.8%	-2.0%	2.8%
Same-Store NOI Growth (Accrual) (%)	-2.1%	1.7%	3.2%
Core EBITDA to Total Revenues (%)	55.3%	54.8%	54.5%

Leasing & KPI trends

KPI	Q3 2024	Q2 2025	Q3 2025
Total Leasing (sf ‘000)	461	712	724
New Tenant Leasing (sf ‘000)	205	468	551
Rent Roll-Up (Cash)	4.0%	7.3%	8.6%
Rent Roll-Up (Accrual)	8.5%	13.6%	20.2%
Leased % (end of period)	88.8%	88.7%	89.2%

Estimates vs Actuals (S&P Global consensus)

Metric	Consensus	Actual	Surprise
Revenue ($USD ‘000)	139,228*	139,163	-65
GAAP EPS ($)	-0.046*	-0.11	-0.06

Values with * are from S&P Global consensus estimates via GetEstimates.

Segment/Market mix (Annualized Lease Revenue, ALR)

Market	ALR ($USD ‘000)	% ALR
Atlanta	181,734	31.6%
Dallas	112,651	19.6%
Orlando	66,543	11.6%
Northern VA / DC	57,038	9.9%
New York	54,963	9.6%
Minneapolis	47,898	8.3%
Boston	33,251	5.8%
Other	20,691	3.6%

Additional backlogs and pipeline

Executed not-yet-commenced leases: ~920K sf representing ~$38.7M annual cash rent .
Under abatement: ~1.1M sf representing ~$35.7M annual cash rent .
Management aggregate framing: ~ $75M combined future annual cash rent from uncommenced and abatement cohorts, with ~70% expected to cash-flow in 2026 .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Core FFO per Diluted Share	FY2025	$1.38–$1.44	$1.40–$1.42	Narrowed; low end raised
NAREIT FFO (Total, $M)	FY2025	$167–$175	$168–$172	Narrowed
Net Loss ($M)	FY2025	$(54)–$(51)	$(53)–$(51)	Narrowed
Depreciation ($M)	FY2025	$165–$168	$163–$165	Slightly lower
Amortization ($M)	FY2025	$58–$60	$60–$60	Maintained (tightened)
Interest Expense, net ($M)	FY2025	—	$127–$129	Reiterated assumption
G&A Expense ($M)	FY2025	—	$30–$32	Reiterated assumption
Executed Leasing (sf)	FY2025	1.4–1.6M (start-of-year)	2.2–2.4M	Raised during 2025
Year-end Leased % (in-service)	FY2025	—	~89–90%	Reiterated target
Dividend	FY2025	$0.125/qtr paid through Q1 2025	Suspended (capital redeployed)	Suspended in 2025

Note: Where “Previous Guidance” is “—”, the company did not disclose a prior range in the supplemental; items shown under “Current Guidance” are explicit assumptions from the Q3 supplemental .

Earnings Call Themes & Trends

Topic	Q1 2025 (Q-2)	Q2 2025 (Q-1)	Q3 2025 (Current)	Trend
Leasing momentum/flight-to-quality	363K sf; strong new leases; dividend suspended to fund leasing; backlog $67M	712K sf; record new leasing; backlog $71M	724K sf; record new leasing; new leases > decade high	Accelerating
Same-Store NOI	Mixed, weighted to 2026 commencements	Improvement expected into 2026	Cash and accrual both positive in Q3	Improving
Debt/refinancing	Refinancing completed; no maturities until 2028	Repurchased $68M of 9.25% notes	-10 bps on SOFR facilities; refinance tailwind potential (~$0.17 FFO/share)	De-risking; optionality
NYC lease	Confidence in renewal by YE 2025	Expect renewal timing around late 2025	Delay into early 2026; confidence maintained; holdover penalty noted	Timing pushed; conviction steady
Redevelopment/out-of-service	Legal-stage pipeline ~300K sf	Out-of-service approached 60% leased	54% leased, projecting 60–70% YE; strong demand	Improving
Macro office demand	Mixed; slower national gross leasing early 2025	Positive absorption in several PDM markets	Sector turning the corner; national positive absorption	Improving

Management Commentary

“Over the last two years Piedmont has leased over five million square feet… with rental rate roll-ups of ~9% and 17% on a cash and accrual basis, respectively… portfolio stands at 89.2% leased… almost $40 million of annual contractual rent from recently executed leases starts to commence.” .
“Third quarter results [were] driven by… strong leasing… exceeding consensus FFO by 3% and achieving record levels of leasing.” .
“We anticipate the out-of-service assets will reach stabilization by the end of 2026.” .
“Based on the current forward yield curve, we expect all of our unsecured debt maturing… could be refinanced at lower interest rates… refinancing the remaining $532 million of our outstanding 9.25% bonds… ~$21 million interest savings and ~$0.17 accretive to FFO per share.” .
“We reiterated our revised guidance of 2.2 to 2.4 million square feet [leased in 2025].” .

Q&A Highlights

Expansion vs contraction: Five straight quarters of net expansions; in Q3, 16 expansions vs 2 contractions (~+40K sf net); larger tenants upgrading to higher-quality space .
2026/2027 earnings outlook: Management targeting mid-single-digit organic FFO growth in 2026–2027 before any refinancing upside; guidance excludes M&A or refi benefits .
Refinancing path: Multiple avenues (open market repurchase, tender, make-whole); ~400 bps differential vs 9.25% bonds cited .
NYC lease: Timing pushed into early 2026 due to process complexity; strong renewal conviction; $8M annual holdover penalty provides leverage .
Backlog timing: Of ~$75M future annual cash rent, ~70% expected to cash-flow in 2026; ~$26M of ~$40M uncommenced likely realized in 2026 .

Estimates Context

S&P Global consensus (limited coverage: 1 EPS estimate, 2 revenue estimates) had Q3 2025 revenue essentially in line ($139.23M*) and GAAP EPS at -$0.05*, while actual revenue was $139.16M and GAAP EPS was -$0.11; management cited a ~3% Core FFO beat vs consensus (not in S&P feed) .
Given REITs are evaluated on FFO metrics, street models may need to lift 2026–2027 FFO on leasing backlog commencement and potential debt refinancing tailwinds .

Values with * are from S&P Global.

Key Takeaways for Investors

Leasing momentum is the core driver: two consecutive record quarters with strong rent roll-ups should translate into NOI/FFO growth as abatements end and uncommenced leases begin (bulk in 2026) .
Guidance de-risked: FY25 Core FFO narrowed to $1.40–$1.42, while year-end leased % target (89–90%) remains intact; execution risk shifts to timing rather than demand .
2026 setup: ~$75M of future annual cash rent (uncommenced + abatement) provides visible uplift; management targets mid-single-digit organic FFO growth even before refinancing upside .
Balance sheet optionality: No maturities until 2028; potential refinancing of 9.25% notes could add ~$0.17/share to FFO over time; -10 bps achieved on SOFR facilities in Q3 .
Watch NYC lease: Renewal now expected in early 2026; holdover economics and limited competing blocks reduce risk, but timing remains a swing factor .
Sunbelt weighting and asset quality continue to attract larger tenants; redevelopment assets in Minneapolis are leasing ahead of plan with rising rents .

Supporting Documents Reviewed

Q3 2025 8-K with Earnings Release & Supplemental (full): key P&L, leasing, balance sheet, guidance, KPIs .
Q3 2025 Earnings Call (full): management strategy, backlog timing, refinancing optionality, NYC lease update .
Q2 2025 Earnings Call (full) and Q2 Press Release: prior trends, backlog, guidance commentary .
Q1 2025 Earnings Call (full) and Q1 Press Release: dividend suspension to fund accretive leasing .
Q3 2025 Leasing Update Press Release (Sept 9, 2025): intra-quarter leasing progress .

Piedmont Realty Trust, Inc. (PDM)·Q3 2025 Earnings Summary