Piedmont Office Realty Trust Inc

Greetings. Welcome to the Piedmont Office Realty Trust Incorporated third quarter 2024 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Laura Moon. You may begin.

Thank you, operator, and good morning, everyone. We appreciate you joining us today for Piedmont's third quarter 2024 earnings conference call. Last night, we filed our Form 10-Q and an 8-K that includes our earnings release and our unaudited supplemental information for the third quarter of 2024 that is available for your review on our website at piedmontrete.com under the investor relations section. During this call, you will 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. Examples of forward-looking statements include those related to Piedmont's future revenues and operating income, dividends and financial guidance, future financing, 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. 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 supplemental financial information which were filed last night. At this time, our President and Chief Executive Officer, Brent Smith, will provide some opening comments regarding third quarter operating results. Brent?

Thanks, Laura. Good morning, everyone, and thank you for joining us today as we review our third quarter results. In addition to Laura, on the line with me this morning are George Wells, our Chief Operating Officer, Chris Colmay, our EVP of Investment, Bobby Bowers, our Chief Financial Officer, and Sherry Rexrode, our new EVP of Finance. We also have the usual full complement of our management team available to answer your questions. In our business, There is no doubt, name of the game is leasing. Leasing drives occupancy, which drives earnings, and ultimately cash flow. And here at Piedmont, we're undoubtedly experiencing great leasing success with the momentum heading into next year. During the third quarter, we executed over 461,000 square feet of total leasing, which brings our total leasing year to date to approximately 2 million square feet, which is the most leasing we've done in the first nine months of a year in over a decade. Importantly, this leasing success helps lift the overall lease percentage of our in-service portfolio to 88.8%, the highest level it's been since the first quarter of 2020, which marks the beginning of the COVID-19 pandemic. Incidentally, 2 million square feet of leasing on an annual basis is what we would normally call a great year, and we still have another quarter to go with a robust pipeline of approximately 3 million square feet of potential leases in the proposal stage. I'd also note that the activity is broad-based across industries and exhibiting growth in all of our sub-markets, excluding Washington, D.C., which has its own unique set of challenges. Furthermore, the leases we have signed so far this year have resulted in double-digit rental rate growth of 12% on a cash basis and almost 20% on a accrual basis once those leases begin. George will provide market specifics and details on the leasing pipeline in a moment. but we believe that the investments that we've made in our portfolio, combined with our relentless focus on best-in-class service and a sustainability mindset, are resonating with both existing and prospective tenants alike and demonstrating the growing demand for highly amenitized, well-located work environments operated by a financially stable landlord. The headlines reinforce our belief that the macro environment is improving. JLL's third quarter office report is entitled Tide beginning to shift for U.S. office as availability rate declines for the first time in five years. Well-known industry-leading companies like Salesforce, 3M, and Amazon continue to require greater in-office attendance, which will likely influence others to follow suit. A recent KPMG survey of 400 U.S. CEOs revealed that 80% of the CEOs expect corporate employees to be present in their offices full-time within three years. That's a substantial increase from the 34% expectation in this group's April survey. More widespread in-office attendance is surely contributing to positive trends, like four straight quarters of decreasing sublease availability and three straight years of declining downsized rates. We've witnessed this phenomenon firsthand in our own portfolio with a number of tenant expansions, including a large e-commerce tenant in Dallas, And from the supply side, JLL also sees favorable trends as new construction starts are dropping to new lows and obsolete commodity office is rationalized and repurposed. We're seeing positive absorption in the top tier assets. Though the overall market continues to experience negative absorption, however, that trend too is improving. As I've noted on prior calls, the top five to 10 assets in a sub-market are gaining market share and demonstrating positive absorptions. It is this improving macro backdrop combined with the leasing success that we have experienced in our own portfolio thus far this year and our robust pipeline that buoys our optimism as we look to the remainder of this year and beyond. Although it is true that it will take a few quarters for leasing success to translate to cash flow, we currently have a backlog of 1.5 million square feet of leases representing approximately 48 million of additional annual revenues and our contractual expirations to the end of 2025 are very manageable at less than 11% of annual revenue. Although there will always be one or two vacancies in any given year, we have proven over the past several years that our strategy has been very effective in maintaining and attracting new customers in an extraordinarily narrowly competitive environment, and we believe that our prospects for future growth look promising as the overall office environment improves. Shifting gears, I want to recognize the Piedmont team for once again, achieving five star and green star recognition from Gresby based on 2023 sustainability performance. Furthermore, our scores ranked in the top decile for participating listed American companies, a huge accomplishment for Piedmont and one that takes daily focus from not only our property management team, but many other team members throughout the company. If you have a moment, I hope that you will check out our recently published annual ESG report, which is available electronically on our website. With that, I will hand the call over to George, who will go into more details on third quarter operational results. George?