Piedmont Realty Trust raises 2026 Core FFO outlook to $1.55-$1.57 a share

Piedmont Realty Trust (NYSE: PDM), an owner of Class A office buildings in US Sunbelt markets, raised its 2026 outlook for Core funds from operations (FFO) to $1.55-$1.57 a share, according to its third-quarter earnings release.

What happened

Core FFO, a REIT earnings measure that removes gains and losses on property sales and debt extinguishment as well as depreciation and amortization, was $0.39 per diluted share in the quarter ended September 30, up from $0.35 a year earlier. Piedmont attributed the increase to rental rate growth and new leases.

The company reported a net loss of $21.0 million, or $0.17 per diluted share, compared with a net loss of $13.5 million, or $0.11 a share, in the third quarter of 2025. The 2026 quarter included a $20.2 million loss on early extinguishment of debt and an $8.9 million gain on the sale of real estate.

Same Store net operating income rose 7.5% on a cash basis and 6.9% on an accrual basis. Piedmont completed about 406,000 square feet of leasing, with cash rents on leases for space vacant a year or less up 26.2% and accrual rents up 34.6%. The in-service portfolio was 87.7% leased on September 30, down from 88.9% on June 30, which the company said reflected expiring square footage outweighing new leases and the purchase of a building that was 83% leased.

Piedmont issued $230 million of 2.875% exchangeable senior notes due 2031 and used the proceeds, with borrowings under its credit line, to redeem its 9.25% senior notes due 2028. Its weighted average cost of debt was 4.78% at the end of September, down from 5.58% at the end of 2025, and it reported no final debt maturities until October 2028.

What to watch

The company set the outlook for the year ending December 31, 2026 at $1.55 to $1.57 a share, up from an initial range of $1.47 to $1.53, and assumed year-end in-service leased space of about 87.5% to 88.5%. Piedmont scheduled a conference call for 9:00 a.m. ET on Tuesday, October 27, to review the results.