Piedmont Office Realty Trust Inc

Good day, everyone. Welcome to Piedmont Realty Trust Inc's second quarter 2026 earnings call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Laura Moon. Please go ahead.

Thank you, Operator, and good morning, everyone. We appreciate you joining us today for Piedmont's second quarter 2026 earnings conference call. Last night we filed our 10-Q and an 8-K that includes our earnings release and unaudited supplemental information for the second quarter of 2026. Both of these documents are 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 supplemental information 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 in today's call, representatives of the company may refer to certain non-GAAP financial measures such as FFO, Core FFO, AFFO, and SafeStore NOI. The definitions and reconciliations of these non-GAAP measures are contained in the supplemental financial information which was filed last night. At this time, our President and Chief Executive Officer, Brent Smith, will provide some opening comments regarding second quarter 2026 operating results. Brent?

Thanks, Laura. Good morning, and thank you for joining us today as we review our second quarter 2026 results. In addition to Laura, on the line with me this morning are George Wells and Alex Valente, our Chief Operating Officers, Chris Kollme, our EVP of Investments, and Sherry Rexroad, our Chief Financial Officer. We also have the usual full compliment of our management team available to answer your questions. Piedmont had a strong quarter, beating consensus by a penny due to operational outperformance and raising our 2026 outlook for the second quarter in a row, which Sherry will touch on more in a moment. Our Piedmont places are generating meaningful earnings and cash flow growth, as office using demand continues to strengthen for high quality, well-located, amenitized assets. The U.S. office market is no longer defined by excess space, but rather by increasingly constrained supply at differentiated office buildings, driving higher occupancy, accelerating rent growth, and reducing tenant concessions. Leasing activity has reached post-pandemic highs as availability continues to decline across most major markets and is now broadening to more metros and submarkets. While the development pipeline remains at historically low levels with demand recovering and new supply scarce, our Piedmont places are benefiting from a more favorable operating environment and meaningful pricing power. As I noted on our last earnings call, Piedmont has materially increased asking rates across a substantial portion of the portfolio. In most cases, more than 15% over the past 12 to 18 months. Those rate increases implemented across the portfolio in early 2026 are now being reflected in our quarterly lease metrics. During the quarter, we signed 460,000 square feet of leasing with rental rate increases of 14% on a cash basis and over 32% on an accrual basis. And in fact, over the last four quarters, the average rental rate increase on a cash basis has been 12%, which is representative of the rental mark to market and embedded growth in the portfolio. Having renovated 90% of the portfolio since 2020, our amenity-rich, hospitality-driven Piedmont places are among the best assets in their respective sub-markets and are leasing at record high rental rates. During Q2, we achieved the highest quarterly average net effective rent after CapEx in the company's history, now reaching the mid-20s per square foot, up more than 20% over the prior trailing 12-month average. Even more encouraging is that our rents still remain 35% to 40% below new construction pricing, providing further runway to increase rental rates. Additionally, Piedmont has leased over 80% of the portfolio since the pandemic, meaning the vast majority of our customers have already right-sized and upgraded their office space for the modern workforce. Our average tenant size across the approximately 16 million square foot portfolio is now just under 17,000 square feet, with customer and industry diversification providing insulation against potential workforce disruption from AI implementation. Tiedemont customers with lease expiration several years out are also recognizing that the market for premium office space is tightening, particularly for tenants that occupy a full floor or greater. As a result, we are seeing customers approach us about renewals of their space well in advance of the expiration. In the coming quarters, we anticipate early renewal discussions with existing tenancy to accelerate. which should bolster client retention ratios above our 60 to 70% historical average with the ability to reduce free rent and tenant capital concessions. At Piedmont, we recognize the most effective way to reduce capital expenditures on leases is to retain our existing customers. That's why we continue to invest in our team and technology to create the best office experience for our clients. This year, the team's hard work culminated in Piedmont being recognized by Kingsley as a top five national office platform, the highest ranking among all public office companies. For those who may not be familiar, Kingsley is a third party research firm that conducts a national survey of office consumers to evaluate their landlord. Most of our public peers participate in the survey, so we couldn't be more proud to be recognized as a top five world-class operator. Additionally, during the second quarter, nine projects throughout the portfolio won the Building Owners and Managers Association, or BOMAs, Outstanding Building of the Year Award in their respective size categories, a tangible testament to the quality of our product and service offerings. The strategic reposition of the Piedmont portfolio, along with the substantial leasing we've accomplished over the past 12 months, is translating into improved operating metrics, including higher economic occupancy, now over 80% for our in-service portfolio, with continued improvement in the coming quarters. Same-store cash and OI growth, 10% on a cash basis for the first half of the year, and meaningful earnings growth. Two cents for the first half of 26 when compared to the first half of 25. Further, the portfolio is approaching 90% leased, and as of June 30th, inclusive of our out-of-service portfolio, had an executed pipeline of leases that have not commenced equal to approximately $39 million of annualized cash rents. That's the equivalent of 570 basis points of occupancy that will flow into earnings over the next several quarters. The investment thesis in Piedmont is straightforward. Demand for differentiated office product is increasing while supply is shrinking. Return to office mandates are becoming more common and more enforceable. Companies recognize that the office is critical to the four C's, building culture, Creativity, Collaboration, and Connectivity. At the same time, new office construction remains near zero, older buildings continue to be removed from inventory through conversion or demolition, and many financially constrained owners lack the capital to compete. Piedmont is uniquely positioned for success in the marketplace. We're generating the highest earnings and cash flow growth in the office sector. and traded a very compelling valuation with net effective rents after CapEx of $25 per square foot on a stock price that equates to a gross asset value of approximately $220 per square foot. Furthermore, we currently have an outsized earnings backlog, great opportunities for occupancy absorption, 10 to 15% of embedded rental rate growth, and opportunities for accretive debt refinancings, which will all drive core FFO higher in the near term. With that, I'll hand it over to George for further details on second quarter operational performance. George?