PDM

Market Demand & Portfolio Positioning

• Demand for high-quality, well-located, amenitized office space is strengthening, with constrained new supply and reduced availability across most major U.S. markets, driving higher occupancy, accelerating rent growth, and lower tenant concessions
• 90% of the 16 million square foot portfolio has been renovated since 2020, with current net effective rents still 35% to 40% below new construction pricing, leaving room for future rent increases
• Over 80% of the portfolio has been re-leased since the pandemic, with diversified tenant sizes and industries that insulate the portfolio against potential AI-driven workforce disruption
• Increased early renewal discussions with existing tenants are expected to accelerate, which is projected to lift retention above the historical 60-70% average and reduce free rent and tenant capital concessions

Leasing Operational Performance

• Q2 2026 signed 460,000 square feet of leases, with 14% cash rental rate increases and 32% accrual rental rate increases year-over-year; 4-quarter average cash rental rate growth is 12%
• 9 consecutive quarters of leasing expansions outpacing contractions, with an average new transaction size of 11,000 square feet and a 11-year weighted average lease term for new deals
• Regional performance highlights: A 73,000 square foot 12-year defense contractor lease was signed in Northern Virginia, 130,000 square feet of deals were completed across Atlanta submarkets including a 57,000 square foot 15-year preemptive backfill lease, Dallas closed 107,000 square feet of deals including an 11-year extension with 42% cash rent growth
• Redevelopment of out-of-service properties reached 83% leased (up from 76% in the prior quarter), with full stabilization expected by the end of 2026
• Total 2026 full-year leasing volume is on track to reach the high end of the prior guidance range of 2 million square feet

Portfolio & Industry Recognition

• Piedmont was ranked a top five national office platform by Kingsley, the highest ranking among all public U.S. office REITs
• Nine portfolio projects won BOMA's Outstanding Building of the Year Award in their respective size categories in Q2 2026

Investment & Balance Sheet Activity

• The company maintains capital discipline, focused on optimizing the portfolio, recycling capital from mature/non-core assets, and pursuing accretive value-add acquisitions in existing core markets
• Two non-core land parcels are under contract for sale: the Royal Lane (Dallas) parcel is expected to close in Q3 2026 for ~$12 million in net proceeds, while the Orlando parcel is expected to close in mid-2027
• The company successfully refinanced its $325 million term loan maturing in 2027 to a $400 million term loan maturing in 2031, with a 15 basis point lower spread; net proceeds were used to pay down the revolving credit line, leaving full $600 million capacity available as of quarter-end
• No debt maturities until 2028, with a staggered maturity schedule of ~20% per year from 2028 to 2033, and a weighted average cost of debt of 5.5%

• Management increased 2026 annual core FFO guidance to a range of $1.50 to $1.55 per diluted share, a 2.5 cent increase at the midpoint from prior guidance, representing over 8% year-over-year earnings growth
• Same-store cash NOI guidance was increased to a range of 5% to 8%, a 200 basis point upward revision from original 2026 guidance
• Net debt to EBITDA is projected to fall below 7.0x by the end of 2026, with an intermediate-term target of 6.5x by 2027-2028 and a long-term target of 6.0x
• The overall portfolio is projected to reach low-90% leased occupancy by 2027
• Reinstating the suspended dividend is not expected to be considered by the board of directors until 2027 at the earliest, pending further deleveraging and consistent positive free cash flow after CapEx

Piedmont Realty Trust is a single-segment office real estate company focused on premium, amenitized office properties across multiple U.S. markets. Core FFO per diluted share for Q2 2026 was 38 cents, 1 cent above consensus and 2 cents higher than Q2 2025. Total AFFO for the quarter was approximately $31 million. The company achieved 9% same-store cash NOI growth in Q2 2026, with 10% same-store cash NOI growth for the first half of 2026. As of June 30, 2026, the in-service portfolio has economic occupancy over 80%, with the total portfolio approaching 90% leased. Net effective rent after CapEx hit a company record of $25.56 per square foot, up more than 20% from the prior 12-month average. There is $39 million in annualized cash rent from signed but not-yet-commenced leases, equal to 570 basis points of future occupancy.

• Forward-looking statements about future occupancy, rent growth, earnings, and transaction activity are subject to inherent uncertainties that could cause actual results to differ materially from expectations, per standard SEC disclosures
• The large pending lease renewal with the City of New York for 60 Broad is still undergoing required municipal reviews and approval, with execution delayed to Q4 2026, though management does not expect material earnings impact from the holdover period
• Overall transaction market liquidity remains limited, with only a small number of well-capitalized institutional investors active in office acquisitions currently
• Near-term cash flow can be lumpy due to ongoing construction and tenant improvement spend for newly signed leases
• Macroeconomic uncertainty and elevated interest rates could impact tenant demand and transaction activity, though management has not seen this materialize in their premium portfolio segment to date

Q: What factors are driving accelerating demand for premium office space despite broader macroeconomic uncertainty? / A: Management notes sustained demand driven by companies prioritizing high-quality collaborative spaces to rebuild corporate culture and support productivity. Around 75% of 2026 projected full-year leasing volume is new business, with demand spread across all core submarkets. AI-driven productivity growth is supporting business expansion rather than job loss, and Piedmont's portfolio is concentrated in stable growth sectors like professional services, financial services, and insurance, with limited exposure to stagnant tech sector hiring. The company's position of offering premium space at a discount to new construction also drives increased tenant demand.

Q: What is the company's long-term leverage target after reaching the sub-7x net debt to EBITDA target by end-2026? / A: Management confirmed that after reaching the sub-7x target in 2026, the intermediate-term (2027-2028) leverage target is 6.5x net debt to EBITDA, with a longer-term target of 6.0x. This gradual deleveraging is a core capital allocation priority before any other uses of excess free cash flow are considered.

Q: With the company generating consistent AFFO well above historical dividend levels, what are the current priorities for excess cash flow, and when might the dividend be reinstated? / A: Management notes that AFFO does not account for all current construction and tenant improvement capital spend, so actual free cash flow is lower than the headline quarterly AFFO figure. Near-term excess cash flow is prioritized for paying down debt, particularly higher-coupon 9.25% bonds, to accelerate deleveraging. Share repurchases are not a current priority, and acquisitions of accretive value-add assets are prioritized over returning capital to shareholders. The board will not consider reinstating the dividend until 2027 at the earliest, after deleveraging targets are met and sustained positive free cash flow after CapEx is confirmed.

Q: What types of acquisition opportunities is the company targeting in the Sunbelt, and what is prioritized for these assets? / A: The company is focused on off-market or underappreciated premium assets in its core growth markets of Dallas and Northern Virginia. Target assets are well-located, older vintage class A properties with good structural bones, 70-80% occupancy, that have not been renovated to modern standards. Management can create value by implementing the Piedmont Place repositioning strategy, driving rental rate growth and lease-up, with going-in entry yields that are accretive to existing earnings. The company is targeting scale in core markets to gain local market pricing power, focusing on undervalued assets rather than expensive newly built properties.