 Atlanta, GA, July 29, 2020 GLOBE NEWSWIRE -- Piedmont Office Realty Trust, Inc. Piedmont or the Company NYSE:PDM, an owner of Class A office properties located primarily in select sub-markets within seven major Eastern U.S. office markets, today announced its results for the quarter ended June 30, 2020.Highlights for the Quarter Ended June 30, 2020: Reported net income applicable to common stockholders of 192.4 million, or 1.52 per diluted share, for the quarter ended June 30, 2020, as compared with 8.2 million, or 0.06 per diluted share, for the quarter ended June 30, 2019; Achieved a 14 increase in Core Funds From Operations, reporting 0.49 per diluted share for the quarter ended June 30, 2020 as compared to 0.43 for the quarter ended June 30, 2019; Completed the disposition of 1901 Market Street, the Companys only Philadelphia asset, for approximately 360 million, resulting in the recognition of a 191.4 million gain on sale of real estate assets that is included in the second quarters results of operations; Related to the sale of 1901 Market Street, the Company prepaid a 160 million mortgage secured by the property, resulting in the recognition of a 9.3 loss on early extinguishment of debt that is also included in the second quarters results of operations; Completed approximately 271,000 square feet of primarily renewal leasing, resulting in an approximately 3.7 and 6.4 roll up in cash and accrual rents, respectively, on leases executed during the quarter for space vacant for one year or less; and Collected 99 of billed tenant receivables during the second quarter.Commenting on the second quarters results, Brent Smith, President and Chief Executive Officer, said, The sale of 1901 Market Street was definitely the highlight of our quarter, concluding a successful recycling story for Piedmont, and allowing us to dispose of a long-term, 100-leased asset in a non-strategic market, and to fully reinvest the proceeds accretively into a strategic submarket in Dallas. As a result of this significant transaction, 96 of our annualized lease revenue is now generated from our seven core markets, with approximately half from Sunbelt locations. While new leasing activity was curtailed during the quarter due to the COVID-19 restrictions, we continue to experience good lease renewals and strong rent collections from our portfolio of credit-worthy tenants and are thankful for the strong balance sheet and liquidity position that have always been a part of our operating objectives. We are beginning to see improved leasing activity in several of our markets, which are easily accessible, provide convenient, walkable amenities and are not dependent on mass transit.Results for the Quarter ended June 30, 2020 Piedmont recognized net income applicable to common stockholders for the three months ended June 30, 2020 of 192.4 million, or 1.52 per diluted share, as compared with 8.2 million, or 0.06 per diluted share, for the three months ended June 30, 2019. The second quarter of 2020 included a 191.4 million gain on sale of real estate asset and a 9.3 million loss on early extinguishment of debt associated with the sale of 1901 Market Street in Philadelphia, PA and resulting repayment of the 160 million mortgage associated with the property during the quarter.Funds From Operations FFO, which removes the impact of the gain on sale of real estate asset mentioned above, as well as depreciation and amortization, was 0.41 per diluted share for both the three months ended June 30, 2020 and 2019. The second quarter of 2020s results include the 9.3 million loss on early extinguishment of debt mentioned above, offset by rental rate growth throughout the portfolio over the past twelve months, cost savings from reduced active occupancy, the commencement of certain large leases, and net acquisition and disposition activity since April 1, 2019.Core Funds From Operations Core FFO, which removes the loss on early extinguishment of debt mentioned above, as well as the same items enumerated in calculating FFO, was 0.49 per diluted share for the three months ended June 30, 2020, as compared with 0.43 per diluted share for the three months ended June 30, 2019 reflecting rental rate growth throughout the portfolio over the past twelve months, the commencement of certain large leases, as well as net acquisition and disposition activity since April 1, 2019.Total revenues and property operating costs were 134.6 million and 53.1 million, respectively, for the three months ended June 30, 2020, compared to 130.7 million and 52.4 million, respectively, for the second quarter of 2019, with both line items reflecting the commencement of new leases, lower costs from reduced active occupancy, the expiration of operating expense recovery abatements, and net transactional activity during the twelve months prior to June 30, 2020. General and administrative expense was 5.9 million for the second quarter of 2020 as compared to 12.4 million for the same period in 2019, with the three months ended June 30, 2020 reflecting decreased accruals for stock based compensation, while the amount for the second quarter of 2019 reflects 3.2 million of one-time expenses associated with the senior management transition that took place on June 30, 2019. Leasing Update During the three months ended June 30, 2020, Piedmont completed approximately 271,000 square feet of leasing across its portfolio, with most activity centering around renewals. The most significant lease executed during the second quarter was Brother Internationals renewal of their approximately 102,000 square feet at 200 Bridgewater Crossing in Bridgewater, NJ. The second quarters executed leases for recently occupied space reflected a 3.7 roll up in cash rents and 6.4 increase in accrual rents. As of June 30, 2020, the Companys reported leased percentage and weighted average remaining lease term were approximately 89 and 6.3 years, respectively, with approximately 1.5 million square feet of executed leases for vacant space yet to commence or under rental abatement. Other than the City of New Yorks 313,000 square foot lease that is currently in holdover status at 60 Broad Street in New York, the Company has no other lease expirations greater than 1 of annualized lease revenue during the eighteen month period following June 30, 2020. The Company remains in advanced discussions for the long-term renewal of substantially all of the City of New Yorks leased square footage. Same Store Net Operating Income Same Store NOI increased 1.7 and decreased 2.3 on a cash and accrual basis, respectively, for the three months ended June 30, 2020 as compared to the three months ended June 30, 2019. The increase in cash basis Same Store NOI was attributable to the expiration of lease abatements while the decrease in accrual basis Same Store NOI was primarily the result of the recognition of charges against rental revenue for tenant-specific and general collectibility risks during the second quarter of 2020. Details outlining Piedmonts largest upcoming lease commencements and expirations, the status of certain major leasing activity and a schedule of the largest lease abatements can be found in the Companys quarterly supplemental information package available at and Financing UpdateDuring the three months ended June 30, 2020, Piedmont sold its approximately 801,000 square foot, 45-story, 100-leased 1901 Market Street building in Philadelphia, PA for approximately 360 million, or 450 per square foot, and recognized a gain on sale of real estate assets of approximately 191.4 million in its second quarter results of operations. Additionally, as a result of the sale, Piedmont repaid the 160 million mortgage associated with the property and recognized a loss on early extinguishment of debt of 9.3 million as a result of the prepayment and write-off of unamortized debt issuance costs. The Company used a portion of the remaining proceeds of the sale to pay off the balance outstanding on its 500 million unsecured line of credit and, as a result, the full capacity of the 500 million line is currently available. The transaction was structured as a 1031 exchange with the Companys recent purchase of the Dallas Galleria Office Towers for tax purposes; therefore no special distribution of the gain on sale will be required. As a result of the disposition of 1901 Market Street, 96 of Piedmonts annualized lease revenue is now generated from its seven core markets, with approximately half derived from its Sunbelt locations.Third Quarter 2020 Dividend DeclarationOn July 29, 2020, the board of directors of Piedmont declared a dividend for the third quarter of 2020 in the amount of 0.21 per share on its common stock to stockholders of record as of the close of business on August 28, 2020, payable on September 18, 2020.Impact of COVID-19 on Guidance for 2020 As the duration and severity of the COVID-19 pandemic and the longer-term consequences on the economy and our tenants continue to be unknown, the Company is not providing guidance for 2020 at this time. Notwithstanding the economic backdrop, Piedmont has a strong, diversified tenant base, a majority of which is investment grade quality. Consequently, during the second quarter of 2020 the Company collected 99 of billed tenant receivables, net of approximately 3.6 million of tenant cash receipts that have been deferred until later in 2020 or 2021.Additionally, the Company has a prudent balance sheet with excellent liquidity, including approximately 30 million in cash and full availability under its 500 million line of credit at June 30, 2020 and no debt maturities until late 2021. 