Piedmont Realty Trust Inc (PDM) 2023 Q2 法說會逐字稿

Good day, everyone, and welcome to the Piedmont Office Realty Trust, Inc. Second Quarter 2023 Earnings Call. (Operator Instructions)

大家好，歡迎參加 Piedmont Office Realty Trust, Inc. 2023 年第二季度收益電話會議。 （操作員說明）

It is now my pleasure to turn the floor over to your host, Eddie Guilbert. Sir, the floor is yours.

現在我很高興將發言權交給主持人埃迪·吉爾伯特。先生，地板是你的了。

Thank you, operator, and good afternoon, everyone. We appreciate you joining us today for Piedmont's Second Quarter 2023 Earnings Conference Call.

謝謝接線員，大家下午好。我們感謝您今天加入我們參加 Piedmont 2023 年第二季度收益電話會議。

On Tuesday morning, we filed our 10-Q, and an hour ago, we filed an 8-K that includes our earnings release and our unaudited supplemental information for the second quarter that's available for your review on our website at piedmontreit.com under the Investor Relations section.

週二早上，我們提交了 10-Q，一小時前，我們提交了 8-K，其中包括我們的收益發布和第二季度未經審計的補充信息，您可以在我們的網站 piedmontreit.com 的投資者關係部分下查看這些信息。

During this call, you'll hear from senior officers at Piedmont. Their prepared remarks followed by answers to your questions will contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements address matters which are subject to risks and uncertainties, and therefore, actual results may differ from those we anticipate and discuss today. The risks and uncertainties of these forward-looking statements are discussed in our press release as well as our SEC filings. We encourage everyone to review the more detailed discussion related to risks associated with forward-looking statements in our SEC filings.

在這次通話中，您將聽到皮埃蒙特高級官員的講話。他們準備好的發言以及對您的問題的回答將包含 1995 年《私人證券訴訟改革法案》中定義的前瞻性陳述。這些前瞻性陳述涉及受風險和不確定性影響的事項，因此，實際結果可能與我們今天預期和討論的結果有所不同。我們的新聞稿以及向 SEC 提交的文件中討論了這些前瞻性陳述的風險和不確定性。我們鼓勵大家查看與我們提交給 SEC 的前瞻性陳述相關的風險的更詳細討論。

Examples of forward-looking statements include those related to Piedmont's future revenues and operating income, dividends and financial guidance, future leasing and investment activity and the impacts of this activity on the company's financial and operational results. You should not place any undue reliance on any of these forward-looking statements, and these statements are based upon the information and estimates we have reviewed as of the date the statements are made.

前瞻性陳述的例子包括與 Piedmont 未來收入和營業收入、股息和財務指導、未來租賃和投資活動以及該活動對公司財務和經營業績的影響相關的陳述。您不應過分依賴任何這些前瞻性陳述，這些陳述是基於我們截至陳述之日審查的信息和估計。

Also on today's call, representatives of the company may refer to certain non-GAAP financial measures such as FFO, core FFO, AFFO and same-store NOI. The definitions and reconciliations of these non-GAAP measures are contained in the earnings release and in the supplemental financial information, which were filed earlier this afternoon.

此外，在今天的電話會議上，公司代表可能會提及某些非 GAAP 財務指標，例如 FFO、核心 FFO、AFFO 和同店 NOI。這些非公認會計原則措施的定義和調節包含在今天下午早些時候提交的收益報告和補充財務信息中。

At this time, our President and Chief Executive Officer, Brent Smith, will provide an update on our recent refinancing activity and second quarter operating results. Brent?

此時，我們的總裁兼首席執行官布倫特·史密斯將提供有關我們最近的再融資活動和第二季度運營業績的最新信息。布倫特？

Thanks, Eddie, and good afternoon, everyone. As we appreciate all of you for accommodating us on a short notice of this moved-up earnings call. Given the refinancing activity that we announced Tuesday, we felt it was important to go ahead and get our full quarterly information into the market so that all of our investors have the benefit of the most recent financial and operational information available.

謝謝埃迪，大家下午好。我們感謝你們所有人在短時間內接受我們本次提前召開的財報電話會議。鑑於我們週二宣布的再融資活動，我們認為繼續向市場提供完整的季度信息非常重要，以便我們所有的投資者都能受益於最新的財務和運營信息。

First, I'd like to walk you through our rationale for our recent refinancing activities that we've undertaken and give a brief overview of the quarterly results. Following me, as usual, you will hear from George Wells, our Chief Operating Officer; Chris Kollme, our EVP of Investments; and Bobby Bowers, our Chief Financial Officer. We also have the usual full component of our management team available to answer any questions that you may have.

首先，我想向您介紹我們最近進行的再融資活動的理由，並簡要概述季度業績。像往常一樣，跟隨我，您將聽到我們的首席運營官喬治·威爾斯 (George Wells) 的講話； Chris Kollme，我們的投資執行副總裁；以及我們的首席財務官鮑比·鮑爾斯 (Bobby Bowers)。我們還擁有管理團隊的全部成員，可以回答您可能提出的任何問題。

With that, I'll jump right in on the refinancing activity. As we announced Tuesday afternoon, we have closed a $400 million in aggregate principal amount of 9.25% 5-year unsecured notes. Concurrent with the issuance of the new bonds, we also made a tender offer at par for any and all of our outstanding $400 million unsecured senior notes that are scheduled to mature during the first quarter of 2024. Although we have no way of knowing exactly how many of our current holders will tender their bonds and given the current interest rate environment, we are projecting that a majority of the 24 holders will participate in the tender, which will close next week. While the coupon rate on the new debt is certainly a high watermark for Piedmont, it is unfortunately reflective of where the market currently is for commercial office properties.

有了這個，我將立即參與再融資活動。正如我們週二下午宣布的那樣，我們已完成本金總額為 4 億美元、利率為 9.25% 的 5 年期無擔保票據。在發行新債券的同時，我們還對計劃於 2024 年第一季度到期的所有已發行的 4 億美元無擔保高級票據進行了按面值要約收購。儘管我們無法確切知道有多少現有持有人將投標其債券，並且考慮到當前的利率環境，但我們預計 24 名持有人中的大多數將參與投標，招標將於下週結束。雖然新債務的票面利率對於皮埃蒙特來說無疑是一個高水位，但不幸的是，它反映了目前商業辦公物業的市場狀況。

Over the last several months, we've gone through an extensive process of exploring and analyzing our various capital-raising alternatives, including a number of potential asset sales; the possibility of placing a mortgage on one or more of our properties, either with a balance sheet lender or utilizing the CMBS market; issuing in the unsecured market, either through a bank term loan, private placement or public bond offering; and corporate-level structured financings, including convertible debt and preferred equity, among others. At the end of the day, asset sales have been extremely difficult to complete, given the lack of asset-level financing. And we concluded that whatever modest discount there might be had on a CMBS execution did not justify encumbering more than a half dozen of the assets in our portfolio at low loan-to-value ratios. Finally, the unsecured bond market offered the greatest financing capacity compared to other unsecured alternatives, and maintaining a large unencumbered asset pool is an important consideration for the rating agencies.

在過去的幾個月裡，我們經歷了一個廣泛的過程，探索和分析我們的各種融資方案，包括一些潛在的資產出售；通過資產負債表貸款人或利用 CMBS 市場對我們的一處或多處房產進行抵押的可能性；通過銀行定期貸款、私募或公開債券發行在無擔保市場上發行；以及企業層面的結構性融資，包括可轉換債務和優先股等。歸根結底，由於缺乏資產層面的融資，資產出售極其難以完成。我們得出的結論是，無論 CMBS 執行可能有多少適度的折扣，都不能證明我們的投資組合中超過六種資產以較低的貸款價值比為抵押是合理的。最後，與其他無擔保替代方案相比，無擔保債券市場提供了最大的融資能力，維持龐大的無抵押資產池是評級機構的重要考慮因素。

In addition, a key component of our leasing and capital recycling strategy has been to maintain a flexible balance sheet with ample liquidity, primarily as an unsecured borrower. This has helped the company in many ways, including expediting capital and repositioning programs, allowing greater flexibility to move tenancy throughout the portfolio and avoiding debt prepayment penalties with property dispositions, among others. More recently, the lack of mortgage debt in our portfolio has been instrumental in driving leasing volumes.

此外，我們的租賃和資本回收戰略的一個關鍵組成部分是維持靈活的資產負債表和充足的流動性，主要是作為無擔保借款人。這在很多方面為該公司提供了幫助，包括加快資本和重新定位計劃、允許更大的靈活性來在整個投資組合中轉移租賃、避免財產處置中的債務提前還款處罰等。最近，我們的投資組合中抵押貸款債務的缺乏對推動租賃量起到了重要作用。

Therefore, after considering the continued messaging from the Fed regarding additional interest rate hikes during the latter half of the year and the overall lack of financing opportunities currently available to the office sector generally, we ultimately concluded that accessing the public bond market, while the opportunity was available and addressing our largest near-term maturity now, was the most prudent course of action for Piedmont. The expectation that rates will come back down over the next several years influenced our decision to go with a shorter 5-year tenure for the new notes.

因此，在考慮了美聯儲關於下半年進一步加息的持續信息以及目前辦公部門普遍缺乏融資機會後，我們最終得出結論，進入公共債券市場，雖然有機會並解決我們目前最大的近期到期問題，是皮埃蒙特最謹慎的行動方針。對未來幾年利率將回落的預期影響了我們決定縮短新票據的 5 年期限。

Turning to our operating results. The second quarter of 2023 demonstrated Piedmont's continued success despite the challenges facing the broader office sector. Our leasing formula is working, and we continue to be optimistic about the value proposition for our customers and the opportunity to continue our leasing momentum, particularly in today's capital-constrained market. The flight to quality buildings and owner operators is favoring Piedmont. Quarter after quarter, we will continue to demonstrate that well-designed, amenitized work environments operated by well-capitalized service-minded landlords is garnering outsized demand from small- and medium-sized businesses as well as larger nontech corporate tenants. The flight to quality occurring in the market is playing to Piedmont's strategy, providing premier workspaces at meaningfully lower rental rates versus new construction.

轉向我們的經營業績。儘管更廣泛的辦公行業面臨挑戰，2023 年第二季度皮埃蒙特仍然取得了持續的成功。我們的租賃模式正在發揮作用，我們繼續對客戶的價值主張以及繼續保持租賃勢頭的機會持樂觀態度，特別是在當今資本緊張的市場中。對優質建築和業主運營商的青睞對皮埃蒙特大區有利。每個季度，我們都將繼續證明，由資金雄厚、具有服務意識的業主運營的精心設計、設施齊全的工作環境正在吸引中小型企業以及大型非科技企業租戶的巨大需求。市場上出現的對質量的追求正在符合皮埃蒙特的戰略，以比新建建築低得多的租金提供一流的工作空間。

In brief, we sustained the leasing momentum from the first quarter, with Piedmont's prospective tenant pipeline remaining robust and meaningful tenant lease volumes achieved. In total, we executed almost 585,000 square feet of leasing and generated an over 14% roll up in cash rents. Furthermore, we continue to make significant progress towards the renewal of our largest tenant, U.S. Bank, for the extension of its lease on a substantial majority of its Downtown Minneapolis headquarters location. Given we remain in negotiation and documentation stage on the lease, we're limited with the details we can share, but it's a long-term lease under similar terms and metrics we've discussed on prior earnings calls. U.S. Bank's renewal decisions for its IT and data center operations at Meridian Crossings will follow the conclusion of the downtown agreement, so there are no incremental information regarding that location to share today.

簡而言之，我們維持了第一季度的租賃勢頭，皮埃蒙特的潛在租戶管道仍然保持強勁且實現了有意義的租戶租賃量。我們總共執行了近 585,000 平方英尺的租賃，現金租金增長了 14% 以上。此外，我們繼續在續約我們最大的租戶美國銀行方面取得重大進展，以延長其明尼阿波利斯市中心總部大部分地點的租約。鑑於我們仍處於租賃的談判和文件階段，我們可以分享的細節有限，但這是一項長期租賃，條款和指標與我們在之前的財報電話會議上討論過的類似條款和指標相同。 U.S. Bank 合眾銀行 Meridian Crossings IT 和數據中心業務的更新決定將在市中心協議簽訂後做出，因此今天沒有關於該地點的增量信息可供分享。

At this time, I will hand the call over to George, who will go over to more details around our operational success during the quarter.

此時，我將把電話轉交給喬治，他將詳細介紹我們在本季度的運營成功情況。

Thanks, Brent, and good afternoon, everyone. Persistent demand for Piedmont's high-quality assets led to another quarter of solid operational results. Office users recognize that Piedmont's attractive workplace proposition can be a key driver for encouraging or supporting mandates for more in-house attendance. CBRE spring 2023 U.S. occupier sentiment survey cites on-site food and beverage cafe after ease of commuting and parking as having the most impact for attracting employees back into the office.

謝謝布倫特，大家下午好。對皮埃蒙特優質資產的持續需求帶來了又一個季度的穩健運營業績。辦公室用戶認識到，皮埃蒙特有吸引力的工作場所主張可以成為鼓勵或支持更多內部員工出席的關鍵驅動力。世邦魏理仕 2023 年春季美國租戶信心調查顯示，在通勤和停車便利性之後，現場餐飲咖啡館對吸引員工重返辦公室的影響最大。

At Piedmont, we provide a wide range of local to national food and beverage options across our portfolio, from custom delivery orders, traditional cafes, full-service restaurants with bar service to white table cloth high-end establishment. In a moment, I'll highlight 3 F&B transactions that were completed this quarter and are enhancing our competitive position in the marketplace.

在皮埃蒙特，我們的產品組合提供廣泛的當地到全國性的食品和飲料選擇，從定制送貨訂單、傳統咖啡館、帶酒吧服務的全方位服務餐廳到白色桌布高端場所。稍後，我將重點介紹本季度完成的 3 筆餐飲交易，這些交易正在增強我們在市場上的競爭地位。

Overall, this quarter, we had another strong leasing performance, with 49 lease transactions completed for approximately 585,000 square feet of total overall volume. Of this amount, 237,000 square feet or 41% of the total related to new tenant lease activity, well over our pre-COVID quarterly average of about 175,000 square feet, and our leasing pipeline activity is very strong.

總體而言，本季度我們的租賃表現再次強勁，完成了 49 筆租賃交易，總成交量約為 585,000 平方英尺。其中，237,000 平方英尺（佔總數的 41%）與新租戶租賃活動相關，遠高於新冠疫情爆發前約 175,000 平方英尺的季度平均值，而且我們的租賃渠道活動非常強勁。

Continuing with operational metrics, our lease economics were very favorable with 14.3% and 19.6% roll-up over increase in rents for the quarter on a cash and accrual basis, respectively. And our weighted average lease term achieved on new lease activity for the quarter was just under 10 years. Our lease percentage at the end of the quarter was 86.2%, slightly up when compared to the previous quarter end. Approximately 90% of new tenant activity occurred in our Sunbelt portfolio, where almost 70% of our vacancies reside. Retention rates remain consistent at approximately 70%, no doubt, a reflection on both our customer-centric service approach and high-quality commute-worthy portfolio. Lastly, leasing capital commitments on our year-to-date leasing were $6.29 per square foot per year of lease term and in line with fourth quarter of last year's averages.

繼續關注運營指標，我們的租賃經濟效益非常有利，本季度按現金和權責發生製計算的租金增幅分別為 14.3% 和 19.6%。本季度新租賃活動實現的加權平均租賃期限略低於 10 年。本季度末我們的租賃率為 86.2%，與上一季度末相比略有上升。大約 90% 的新租戶活動發生在我們的 Sunbelt 投資組合中，我們近 70% 的空缺職位都集中在那裡。毫無疑問，保留率始終保持在 70% 左右，這反映了我們以客戶為中心的服務方法和值得通勤的高質量產品組合。最後，我們今年迄今租賃的租賃資本承諾為每年每平方英尺 6.29 美元，與去年第四季度的平均水平一致。

Now I'd like to highlight a few key accomplishments and announcements which occurred in some of our operating markets this quarter. Atlanta, our largest market at almost 5 million square feet and generated 28% of our company's ALR, captured the most activity this quarter, with 16 deals accounting for 300,000 square feet, of which 60% were new leases. Also at the Galleria, an investment company relocated its headquarters from a nearby Class B facility, making this our eighth full-floor larger new deals since 2020, 6 of which are headquarter location. Our Midtown LEED Gold of 999 Peachtree also experienced good activity with 3 new deals, 1 being a high-end F&B operator that's well known in Atlanta, Lazy Betty. This operator has received multiple local culinary awards for its carefully crafted tasting menus and unique dining experience. We anticipate them opening in the fourth quarter.

現在，我想重點介紹本季度我們的一些運營市場中取得的一些關鍵成就和公告。亞特蘭大是我們最大的市場，面積近 500 萬平方英尺，占公司 ALR 的 28%，本季度的活動最為活躍，有 16 筆交易，面積達 300,000 平方英尺，其中 60% 是新租賃。同樣在 Galleria，一家投資公司將其總部從附近的 B 級設施搬遷，這是我們自 2020 年以來第八筆全層大型新交易，其中 6 筆位於總部所在地。我們的市中心 LEED 金級 999 Peachtree 也經歷了良好的活動，新增了 3 筆交易，其中 1 筆是亞特蘭大知名的高端餐飲運營商 Lazy Betty。該經營者因其精心製作的品嚐菜單和獨特的用餐體驗而獲得了多項當地烹飪獎項。我們預計它們將在第四季度開業。

In Northern Virginia, we're excited to welcome Panera Bread as our second F&B operator at our LEED Silver 4250 North Fairfax Tower. We're also pleased that PF Chang renewed its high-performing restaurant at our LEED Silver Arlington Gateway for another 5 years with no concessions. Along with our 3100 Clarendon Tower, all 3 of our NOVA assets are 4-star rated by CoStar and have been designated a walker's paradise due to a plethora of nearby food and beverage options and the locations near metro train stations. CoStar is the industry leader in commercial real estate information, analytics and news and has designated 96% of our ALR of our 17 million square foot portfolio as either 4 or 5 stars, its highest quality rating. Our NOVA portfolio is well positioned to capture shared leasing activity going forward.

在北弗吉尼亞州，我們很高興地歡迎 Panera Bread 成為我們在 LEED Silver 4250 North Fairfax Tower 的第二家餐飲運營商。我們還很高興 PF Chang 將其位於 LEED Silver Arlington Gateway 的高性能餐廳再續簽 5 年，且沒有任何優惠。與我們的 3100 Clarendon Tower 一樣，我們的所有 3 個 NOVA 資產均被 CoStar 評為四星級，並且由於附近有大量的餐飲選擇以及靠近地鐵站的位置，被指定為步行者的天堂。 CoStar 是商業房地產信息、分析和新聞領域的行業領導者，並將我們 1700 萬平方英尺投資組合中 96% 的 ALR 指定為 4 星或 5 星，這是其最高質量評級。我們的 NOVA 投資組合處於有利地位，可以捕捉未來的共享租賃活動。

Let's drop into Minneapolis next on to our largest near-term expiring customer, U.S. Bank. Extension negotiations with the bank at our downtown LEED Gold, U.S. Bank Center are accelerating, and we're optimistic on retaining them for substantially all of its 490,000 square foot of space there. So admittedly, we still have more work to do. As an aside, this world-class tower continues to separate itself from its competitors, with a soon-to-open elite restaurant that will be offering fresh refined seafood in a luxurious environment. This tower also recently won BOMA's international Outstanding Building of the Year Award.

接下來讓我們前往明尼阿波利斯，拜訪我們最大的近期即將到期的客戶美國銀行 (U.S. Bank)。與該銀行在市中心 LEED 金級美國銀行中心的延期談判正在加速進行，我們對保留該中心 490,000 平方英尺的幾乎所有空間持樂觀態度。誠然，我們還有更多工作要做。順便說一句，這座世界級的塔樓繼續從競爭對手中脫穎而出，其即將開業的精英餐廳將在豪華的環境中提供新鮮的精緻海鮮。該塔最近還獲得了BOMA國際年度傑出建築獎。

We will be addressing U.S. Bank's suburban lease location at our Meridian Crossings complex after we complete the larger downtown lease negotiation. We don't have any additional color on the suburban lease at this time, and we would reiterate a more [concerted] extension at this point, say 50%. That said, suburban Minneapolis has been and continues to be quite active for us. Year-to-date, we've completed nearly 70,000 square feet of transactional activity here, with a good deal flow in our pipeline.

在完成更大的市中心租賃談判後，我們將解決美國銀行位於 Meridian Crossings 綜合體的郊區租賃地點問題。目前我們對郊區租約沒有任何額外的規定，我們將重申此時更加[協調一致]的延期，比如 50%。也就是說，明尼阿波利斯郊區一直並將繼續對我們來說非常活躍。今年迄今為止，我們已經在這裡完成了近 70,000 平方英尺的交易活動，並且有大量的交易正在進行中。

Coming back to our overall portfolio, we remain positive about our future near-term leasing trends and operational performance. Tour activity continues at the same healthy pace that we've seen for several quarters. Proposal activity is more than the trailing-12 months, coming in around 2.5 million square feet. With only 3% of the rent roll expiring over the next 2 quarters, we expect positive net space absorption for the rest of the year, resulting in an anticipated year-end lease percentage to end between 87% and 88% that was provided in our initial guidance.

回到我們的整體投資組合，我們對未來的近期租賃趨勢和運營業績仍然持樂觀態度。旅遊活動繼續以我們幾個季度以來看到的健康步伐繼續進行。提案活動超過過去 12 個月，面積約為 250 萬平方英尺。由於只有 3% 的租金在接下來的兩個季度到期，我們預計今年剩餘時間將出現積極的淨空間吸收，從而導致預期年末租賃百分比在我們最初指導中提供的 87% 至 88% 之間。

I'll now turn it over to Chris Kollme to review our second quarter investment activity. Chris?

現在我將把它交給 Chris Kollme 來審查我們第二季度的投資活動。克里斯？

Thank you, George. As you might expect, given the ongoing challenges in the market, I have very little new information to report since the last call. We announced last quarter that our 2 assets in Houston had gone under contract and were through diligence, but terms did contain a financing contingency. The potential buyer is working diligently to secure its capital structure but has not yet been finalized. We expect to have more clarity on their progress in the coming weeks. We will certainly keep you all informed if and when we have additional information to share.

謝謝你，喬治。正如您所料，鑑於市場持續面臨的挑戰，自上次電話會議以來我幾乎沒有什麼新信息可以報告。上季度我們宣布，我們在休斯頓的兩項資產已簽訂合同並經過盡職調查，但條款確實包含融資意外情況。潛在買家正在努力確保其資本結構，但尚未最終確定。我們期望在未來幾週內更清楚地了解他們的進展。如果我們有更多信息可以分享，我們一定會及時通知大家。

As for the balance of our activity, we are in preliminary discussions on select noncore assets, but it is far too early to speculate given the market backdrop. We will continue to work creatively with interested parties on potential dispositions. Any and all sale proceeds will be earmarked towards the reduction of debt.

至於我們活動的平衡，我們正在對選定的非核心資產進行初步討論，但鑑於市場背景，現在猜測還為時過早。我們將繼續與有關各方就潛在處置進行創造性合作。任何及所有出售收益將專門用於減少債務。

With that, I'll turn the call over to Bobby to review our financial results and to update you on 2023 guidance.

接下來，我會將電話轉給 Bobby，以審查我們的財務業績並向您通報 2023 年指導的最新情況。

Thank you, Chris. While we'll be discussing some of this period's financial highlights today, I encourage you to please review the entire earnings release, the 10-Q and the accompanying financial information, which were filed over the last few days for more complete details.

謝謝你，克里斯。雖然我們今天將討論這一時期的一些財務亮點，但我鼓勵您查看過去幾天提交的整個收益報告、10-Q 和隨附的財務信息，以了解更完整的詳細信息。

Core FFO per diluted share for the second quarter of 2023 was $0.45 versus $0.50 per diluted share for the second quarter of 2022, reflecting approximately $0.08 per share dilution from increased interest expense comparatively. But this increase was partially offset by operational growth during the second quarter of this year, resulting from successful leasing efforts, rising rental rates and asset recycling over the past year.

2023 年第二季度稀釋後每股核心 FFO 為 0.45 美元，而 2022 年第二季度稀釋後每股核心 FFO 為 0.50 美元，反映出利息費用相對增加導致每股稀釋約 0.08 美元。但這一增長被今年第二季度的運營增長所部分抵消，這是由於去年成功的租賃工作、租金上漲和資產回收所致。

AFFO generated during the second quarter of 2023 was $44 million and $81 million on a year-to-date basis. Our property operating costs and general and administrative expenses were in line with budget with no unusual variances. As George and Brent noted, leasing has been strong throughout the year, with over 1.1 million square feet of executed leases completed during the first 6 months of the year. Year-to-date, cash rent roll-ups for these newly completed leases are up 10% over expiring rates, and accrual rents are up over 14%.

2023 年第二季度產生的 AFFO 為 4400 萬美元，年初至今為 8100 萬美元。我們的物業運營成本以及一般和管理費用符合預算，沒有異常差異。正如 George 和 Brent 指出的那樣，租賃全年表現強勁，今年前 6 個月完成的租賃面積超過 110 萬平方英尺。今年迄今為止，這些新完成租約的現金租金累計比到期租金上漲了 10%，應計租金上漲了 14% 以上。

Same-store NOI, however, is relatively flat, thus far, for the year compared to the previous year. But this is a timing issue, with 60% more leases yet to commence or an abatement at the end of this quarter. That's a total of 1.3 million square feet versus less than 800,000 square feet that we began the previous year with. With several leases set to commence or begin paying rent, we still project cash NOI growth to be positive between 1% and 3% for the year.

然而，到目前為止，今年同店 NOI 與上一年相比相對持平。但這是一個時間問題，本季度末還有 60% 的租賃尚未開始或減少。總面積為 130 萬平方英尺，而我們去年開始時的面積還不到 80 萬平方英尺。隨著幾項租賃即將開始或開始支付租金，我們仍然預計今年現金 NOI 增長將在 1% 至 3% 之間。

Turning to the balance sheet. During the second quarter, we repaid $350 million in maturing unsecured notes, utilizing our cash and investments on hand and our available $600 million revolver. Now having addressed our $400 million bond maturity subsequent to quarter end, we have no other debt with final maturity until 2025. As Brent noted, a key component of our leasing formula is that our balance sheet and liquidity remains strong, a differentiating factor as prospective tenants scrutinize the capital structure of a potential future office building and landlord. This differentiation among office product is driving increased market share for the highest quality, placemaking assets and well-capitalized landlords. We've already discussed our new 5-year bond issuance, and we've stated that any disposition proceeds will be used to strengthen our balance sheet by paying down our line or our bank term debt.

轉向資產負債表。第二季度，我們利用手頭的現金和投資以及可用的 6 億美元循環資金償還了 3.5 億美元的到期無擔保票據。現在，我們已經解決了季度末後 4 億美元的債券到期問題，我們在 2025 年之前沒有其他最終到期的債務。正如布倫特指出的，我們租賃公式的一個關鍵組成部分是我們的資產負債表和流動性保持強勁，這是一個差異化因素，因為潛在租戶會仔細審查未來潛在辦公樓和房東的資本結構。辦公產品之間的這種差異正在推動最高質量的場所營造資產和資本充足的業主的市場份額的增加。我們已經討論了新的 5 年期債券發行，並且我們已經聲明，任何處置收益都將用於通過償還我們的額度或銀行定期債務來增強我們的資產負債表。

At this time, I'd like to update our guidance for 2023. With the $400 million new debt issuance completed today and in place, the approximate 5% increase in interest rate will result in interest expense increasing approximately $20 million annually. This increased interest expense will negatively impact 2023 earnings, $0.08 per diluted share over the remainder of the year. Therefore, our guidance is lowered and narrowed to $1.74 to $1.80 per diluted share for 2023. This guidance includes approximately $570 million to $580 million of total revenues, $100 million to $104 million of total interest expense for the year and G&A expenses of $28 million to $29 million. This guidance does not include any gains or losses from the potential sale of real estate assets that Chris mentioned. We will update our guidance should a capital transaction occur.

目前，我想更新我們對 2023 年的指導。隨著今天完成並到位的 4 億美元新債券發行，利率大約上漲 5% 將導致利息支出每年增加約 2000 萬美元。增加的利息支出將對 2023 年收益產生負面影響，在今年剩餘時間內每股攤薄收益將受到 0.08 美元的影響。因此，我們對 2023 年稀釋後每股收益的指導下調至 1.74 至 1.80 美元。該指導包括約 5.7 億至 5.8 億美元的總收入、1 億至 1.04 億美元的當年總利息支出以及 2,800 萬至 2,900 萬美元的一般管理費用。本指南不包括克里斯提到的潛在出售房地產資產的任何收益或損失。如果發生資本交易，我們將更新我們的指南。

As I conclude, I will note that our Board of Directors will be meeting next week for a regularly scheduled quarterly Board meeting. Management will be presenting this updated forecast information for their consideration as part of the Board's review of Piedmont's dividend. The company's dividend for the last several years has been based upon our forecasted taxable income that includes our property operating income, interest expense and gains and losses from the sale of real estate assets. With gains anticipated from the possible dispositions that Chris discussed, we are not in a position at this time to speculate on what action the Board may take immediately regarding our dividend policy. However, as has been our long-term policy, we'd expect the dividend to be adjusted to taxable income forecast.

最後，我要指出的是，我們的董事會將於下週召開定期舉行的季度董事會會議。管理層將提交此更新的預測信息供其考慮，作為董事會審查皮埃蒙特股息的一部分。公司過去幾年的股息是基於我們預測的應稅收入，包括我們的財產運營收入、利息支出以及出售房地產資產的損益。鑑於克里斯討論的可能處置的預期收益，我們目前無法推測董事會可能立即就我們的股息政策採取什麼行動。然而，正如我們的長期政策一樣，我們預計股息將根據應稅收入預測進行調整。

With that, I'll turn the call back over to Brent for closing comments.

這樣，我會將電話轉回布倫特以徵求結束意見。

Thank you, George, Chris and Bobby. In summary, for the remainder of the year, we anticipate modest space absorption and operational growth. We will continue to be a net seller of assets as we deleverage the balance sheet and enhance our liquidity resources. But we've -- as we've previously outlined, increased interest expense will continue to weigh on earnings and FFO in the near term.

謝謝喬治、克里斯和鮑比。總之，在今年剩餘時間內，我們預計空間吸收和運營增長將適度。隨著我們去槓桿化資產負債表並增強流動性資源，我們將繼續成為資產的淨賣家。但正如我們之前所概述的，利息支出的增加將在短期內繼續對收益和 FFO 造成壓力。

Finally, I want to thank the outstanding employees at Piedmont, who provide excellent service to our customers each and every day. Their dedication, resilience and hard work continues to drive our leasing success despite the challenging market.

最後，我要感謝皮埃蒙特的優秀員工，他們每天為我們的客戶提供優質的服務。儘管市場充滿挑戰，他們的奉獻精神、韌性和辛勤工作繼續推動我們的租賃取得成功。

With that, I will now ask the operator to provide our listeners with instructions on how they can submit their questions. We will attempt to answer all your questions now, or we will make appropriate later public disclosure, if necessary. Operator?

現在，我將要求接線員向我們的聽眾提供如何提交問題的說明。我們現在將嘗試回答您的所有問題，或者如有必要，我們將在稍後進行適當的公開披露。操作員？

(Operator Instructions) Your first question is coming from Nick Thillman from Baird.

（操作員說明）您的第一個問題來自 Baird 的 Nick Thillman。

Maybe just a little bit on the decision to do the debt offering here instead of waiting maybe a little bit. Is this more of a matter of the debt markets were open so we're just going to get it, rip the Band-Aid off here? Or like maybe walk through, it sounds like there's still a potential for some dispositions. So just kind of wondering around the timing of this transaction.

也許只是一點關於在這裡進行債務發行的決定，而不是等待一點。這是否更多地是債務市場開放的問題，所以我們只是要得到它，撕掉這裡的創可貼？或者就像也許走過一樣，聽起來似乎仍然有一些處置的潛力。所以只是想知道這筆交易的時間。

Sure, Nick. Great question. This is Brent. And again, thanks (inaudible) and being flexible, having moved this up a week, the earnings call.

當然，尼克。很好的問題。這是布倫特。再次感謝（聽不清）並保持靈活性，將收益電話會議提前一周。

And a very reasonable question. We continue to canvass a number of different alternatives as we outlined in the earnings call, including the asset dispositions. But as we noted, it's been very difficult in this environment. Even though we found a reasonable price from an equity standpoint, the debt has just been difficult to achieve. We've continued to evaluate secured debt within our own portfolio, having hired a broker to help us canvass both the insurance kind of bank lending market, if you will, as well as the CMBS market. And then of course, we looked at various forms of unsecured, talking to our own bank lending groups, which we did utilize in early part of this year for a sizable term loan and a number of different structured alternatives as well, getting -- looking at creative situations around convertible preferred or other super structures, if you will, from a capital perspective.

這是一個非常合理的問題。正如我們在財報電話會議中概述的那樣，我們將繼續探討多種不同的替代方案，包括資產處置。但正如我們所指出的，在這種環境下這是非常困難的。儘管我們從股權角度找到了合理的價格，但債務卻很難實現。我們繼續評估我們自己投資組合中的擔保債務，並聘請了一位經紀人來幫助我們考察保險類銀行貸款市場（如果您願意的話）以及 CMBS 市場。當然，我們也研究了各種形式的無抵押貸款，並與我們自己的銀行貸款集團進行了交談，我們在今年早些時候確實利用了這些貸款集團來提供大量定期貸款和許多不同的結構性替代方案，從資本的角度來看，圍繞可轉換優先股或其他超級結構的創造性情況。

But when it boils down to it, there are a couple of things that kind of weighed on our mind. First and foremost, there is a large wall of commercial debt coming due the remainder of this year and next year. And thinking about that overall implication and available funds, there's a lot of basically need and not a lot of supply. So wanting to try to address the 2024 maturities earlier rather than later was our mindset. As we continue to kind of evaluate it's been a very challenging market, certainly at the unsecured side.

但歸根結底，有幾件事讓我們心頭沉重。首先也是最重要的是，今年剩餘時間和明年將有大量商業債務到期。考慮到總體影響和可用資金，基本需求很多，但供應不多。因此，我們的想法是希望儘早解決 2024 年的到期問題。正如我們繼續評估的那樣，這是一個非常具有挑戰性的市場，尤其是在無擔保方面。

But more broadly, just a lot of concerns around recession and the rates. And we had a window here with the general economic malaise has kind of lifted a little bit. I think people were somewhat hopeful of a soft landing, if you will, and some continued data points around reduced inflation overall created a positive economic window we felt producing our positive economic results early and getting ahead of some of that negative headwind -- or sorry, negative headlines that may be come -- forthcoming over the next month or week even. It was just a mindset of trying to go ahead and take some risk off the table, if you will.

但更廣泛地說，只是對經濟衰退和利率的很多擔憂。我們在這裡有一個窗口，總體經濟不景氣有所緩解。我認為人們對軟著陸抱有一定的希望，如果你願意的話，一些關於通脹總體下降的持續數據點創造了一個積極的經濟窗口，我們認為我們提前產生了積極的經濟成果，並領先於一些負面的逆風——或者抱歉，可能會出現的負面頭條新聞——甚至在下個月或下週出現。如果你願意的話，這只是一種嘗試繼續前進並規避一些風險的心態。

We had a lot of inbound inquiries through the, call it, last 3 months. We've been talking to fixed income investors regularly since our last earnings call. And I think a lot of them have done the homework that unfortunately, we haven't seen necessarily in the equity markets to really discern the portfolio, and they kind of heated our comments on following leasing and denoting success within the portfolio in that manner.

過去 3 個月，我們接到了很多入境詢問。自上次財報電話會議以來，我們一直定期與固定收益投資者交談。我認為他們中的很多人都做了功課，不幸的是，我們在股票市場上不一定能真正辨別投資組合，他們對我們對租賃後的評論進行了激烈的評論，並以這種方式表示投資組合的成功。

So we've continued to demonstrate the fixed income market, the stability of the portfolio, the leasing success, the continued rental rate roll-ups, the mindful use of capital. And I think they recognized that they -- we decided it was a good opportunity to go into the market. It was well received, several times oversubscribed in the offering. But of course, the rate was somewhat driven by just the general difficulties in our sector.

因此，我們繼續展示固定收益市場、投資組合的穩定性、租賃的成功、租金率的持續上升以及資本的謹慎使用。我認為他們認識到我們認為這是進入市場的好機會。它受到熱烈歡迎，在發行中獲得了數倍的超額認購。但當然，這一比率在一定程度上是由我們行業的普遍困難推動的。

So I would say it's not representative of what we think the creditworthiness of the portfolio is. That is where unfortunately the market resided. And we were pleased to be able to have the demand to accomplish a $400 million offering and tender and take out those 2024 that will mature now less than 9 months. So in short, we saw a window to derisk maturities, and we took it.

所以我想說它並不代表我們認為的投資組合的信譽度。不幸的是，這就是市場所在的地方。我們很高興能夠滿足完成 4 億美元發行和招標的需求，並剔除那些現在不到 9 個月到期的 2024 年債券。簡而言之，我們看到了一個消除到期風險的窗口，並且抓住了它。

Very helpful. And then maybe just going back to what you're saying about nonencumbering the portfolio, what was like the rate differential between the secured and unsecured options?

很有幫助。然後也許回到你所說的不阻礙投資組合，有擔保期權和無擔保期權之間的利率差異是多少？

Yes. I think even within a secured standpoint, and I noted this on the call, the LTVs were very low. So we were encumbering a number of assets, frankly, more than we would have anticipated to. And the pricing was better than the unsecured market, but I wouldn't say materially better. Particularly, if you think about some of the assets that we might have put debt on, we're almost, I guess, long term in terms of its WALT and probably candidates for harvesting in terms of value because they've been maximized and mature under our ownership, which would have created prepayment penalties in addition to the interest expense incurred.

是的。我認為，即使從安全的角度來看，LTV 也非常低，而且我在電話會議中也指出了這一點。因此，坦率地說，我們對許多資產的負擔超出了我們的預期。而且定價比無擔保市場要好，但我不會說實質上更好。特別是，如果你考慮一下我們可能舉債的一些資產，我想，就其 WALT 而言，我們幾乎是長期的，並且可能是收穫價值的候選者，因為它們在我們的所有權下已經最大化和成熟，除了產生的利息費用之外，這還會產生提前還款罰金。

So really, we felt like the delta between secured and unsecured was within 100 basis points. And we frankly feel like keeping the portfolio unsecured, as we've talked about, is a key component of our leasing strategy today. And overall, our capital recycling strategy, once we're able to continue with that engine of growth and things normalize in the market. So given that lack of material discrepancy in pricing and the benefits of remaining unsecured, we decided to take the window within the market here in the past few days.

事實上，我們認為有擔保和無擔保之間的差異在 100 個基點以內。坦率地說，正如我們所討論的，我們認為保持投資組合無擔保是我們今天租賃策略的關鍵組成部分。總的來說，一旦我們能夠繼續保持增長引擎並且市場正常化，我們的資本回收策略就會實現。因此，考慮到定價上沒有重大差異以及保持無擔保的好處，我們決定在過去幾天內抓住市場的窗口期。

Great. And then maybe last one. It sounds like discussions for U.S. Bank are moving along here. You guys have traditionally or like in the past have said somewhere between 50% to 100% on the downtown renewal. It sounds like we're trending more to the upper end of that range. Is that kind of reading into your comments?

偉大的。然後也許是最後一個。聽起來美國銀行的討論正在這裡進行。你們傳統上或過去曾說過市中心重建的比例在 50% 到 100% 之間。聽起來我們正趨向於該範圍的上限。這是對你的評論的解讀嗎？

That's fair to say, yes.

公平地說，是的。

(Operator Instructions) Your next question is coming from Dylan Burzinski from Green Street.

（操作員說明）您的下一個問題來自 Green Street 的 Dylan Burzinski。

I guess just touching on dispositions and transaction markets, could you comment on sort of the environment today versus maybe 3 to 6 months ago? Are things improving with regards to liquidity coming back to the private capital markets? Or are things still tough?

我想只是談到處置和交易市場，您能否評論一下今天與 3 至 6 個月前相比的環境？私人資本市場的流動性是否有所改善？或者事情仍然很艱難？

I would say maybe improvement on a very, very small margin, but I still think we're going to be in a time period here where there's going to be a lot of headline risk, a lot of defaults and keys being thrown back. Hopefully, there's someone there to catch them. But frankly, right now, the lenders aren't really interested in taking the assets either. So I think you're going to have a time period here, call it, 12 to 18 months, where we're going to continue to deal with some of these issues. And without any debt, there is no equity. So transaction volumes continue to be elusive and, as a result, a sense of pricing and price discovery in the market. And frankly, clarity around underwriting and what an exit cap rate should be is very difficult, and that continues to weigh on overall transaction volumes.

我想說也許會有非常非常小的改善，但我仍然認為我們將處於一個存在大量總體風險、大量違約和密鑰被退回的時期。希望有人能抓住他們。但坦率地說，目前貸方也對拿走這些資產並不真正感興趣。因此，我認為我們將在一段時間內（稱之為 12 至 18 個月）繼續處理其中一些問題。沒有任何債務，就沒有股權。因此，交易量仍然難以捉摸，因此市場上的定價和價格發現意識也難以捉摸。坦率地說，明確承銷和退出上限利率應該是多少是非常困難的，這繼續影響整體交易量。

As we've talked about, those buyers that we've been approached by the market are generally noninstitutional. They're local private equity, local family office who understand the nuances of the market and see opportunities to either not have a competitive bidding pool and/or get a great price. So I think we continue to be very patient in that marketplace, recognizing that we do have some good assets that should garner fair value once things open back up. Houston's under contract. We are being patient with a buyer to find financing, but we'll continue to look at other alternatives and dispositions as well and still guide and accomplish somewhere between $100 million to $200 million of dispositions in the next 6 to 12 months.

正如我們所討論的，市場接觸到的那些買家通常都是非機構買家。他們是當地的私募股權公司、當地的家族辦公室，他們了解市場的細微差別，並看到機會，要么沒有競爭性的投標池，要么獲得很好的價格。因此，我認為我們在這個市場上繼續保持非常耐心，認識到我們確實擁有一些優質資產，一旦情況恢復，這些資產應該獲得公允價值。休斯頓還有合同在身。我們正在耐心等待買家尋找融資，但我們也會繼續尋找其他替代方案和處置，並在未來 6 到 12 個月內仍然指導和完成 1 億到 2 億美元的處置。

And just sort of along those lines, any desire or willingness to offer seller financing in certain instances?

沿著這些思路，在某些情況下是否有向賣方提供融資的願望或意願？

Very relevant point, Dylan. And I think that's really what's gotten most of the transaction volumes that we're aware of, most of them, not all of them, over the goal line. So we have considered in the past, certainly done in the past. At this point right now, with the Houston buyer, we've not capitulated. We've had some discussions, but I don't think that we're meeting maybe the leverage thresholds they would like to. But overall, I think that's something we will continue to consider in some situations. But in the instance of Houston, I think our preference would be to exit the market if possible.

非常相關的一點，迪倫。我認為這確實是我們所知道的大部分交易量（其中大部分（不是全部））超過目標線的原因。所以我們過去考慮過，肯定也做過過去。此時此刻，對於休斯頓買家，我們還沒有屈服。我們已經進行了一些討論，但我認為我們可能沒有達到他們想要的槓桿閾值。但總的來說，我認為在某些情況下我們將繼續考慮這一點。但就休斯頓而言，我認為我們的首選是如果可能的話退出市場。

And then just one last one, if I can. Assuming U.S. Bank gets settled out here at the high end of sort of the range you guys guided to, is that a potential future disposition candidate? Or I guess, just broadly speaking, how are you guys thinking about your Minneapolis presence over the longer-term time horizon?

如果可以的話，就寫最後一篇吧。假設美國銀行在你們指導的範圍的高端安頓下來，這是一個潛在的未來處置候選者嗎？或者我想，從廣義上講，你們如何看待你們在明尼阿波利斯的長期存在？

Yes, Dylan, a very relevant question. I think we're certainly very close with U.S. Bank and in discussion. So I don't want to get too much in detail or ahead of ourselves. But I think we view the long -- the downtown asset is a critical component of U.S. Bank's operations. We would have a meaningful reposition of their space if we were to do a long-term lease like we're talking about here. That's going to take several years to complete. And I think we're very committed overall to our position in Minneapolis, recognizing there may be an opportunity or some buildings to reduce exposure. But near term, I think we're focused on accomplishing those leases, and then we'll worry about opportunities overall in the marketplace.

是的，迪倫，這是一個非常相關的問題。我認為我們與美國銀行的關係肯定非常密切並且正在討論中。所以我不想講太多細節，也不想講得太過分。但我認為，從長遠來看，市中心資產是美國銀行業務的重要組成部分。如果我們要像我們在這裡討論的那樣進行長期租賃，我們將對他們的空間進行有意義的重新定位。這將需要幾年時間才能完成。我認為我們總體上非常致力於我們在明尼阿波利斯的立場，認識到可能有機會或某些建築物可以減少暴露。但短期內，我認為我們的重點是完成這些租賃，然後我們將擔心市場上的整體機會。

That concludes our Q&A session. I will now hand the conference back to Brent Smith for closing remarks. Please go ahead.

我們的問答環節到此結束。現在我將把會議交還給布倫特·史密斯進行閉幕致辭。請繼續。

Well, again, I want to appreciate everyone who's taken the time to get on the call this evening. We certainly have been pleased with the operational performance of the portfolio and look forward to continuing to share that in the quarters to come. I'd like to remind investors as well, we'll be attending the Bank of America REIT Conference on September 12 to 13 in New York City. If you'd like to schedule a meeting with management, please reach out to Eddie Guilbert or Bobby Bowers. And again, thank you, everyone, for joining. Have a good evening.

好吧，我再次感謝今晚抽出時間來參加電話會議的所有人。我們當然對投資組合的運營績效感到滿意，並期待在未來幾個季度繼續分享這一點。我還想提醒投資者，我們將參加 9 月 12 日至 13 日在紐約市舉行的美國銀行 REIT 會議。如果您想安排與管理層的會議，請聯繫 Eddie Guilbert 或 Bobby Bowers。再次感謝大家的加入。祝你晚上愉快。

Thank you, everyone. This concludes today's event. You may disconnect at this time, and have a wonderful day. Thank you for your participation.

謝謝大家。今天的活動到此結束。此時您可能會斷開連接，並度過美好的一天。感謝您的參與。