Item 1.01. Entry Into or Amendment of a Material Definitive Agreement.
On September 17, 2026, Piedmont Operating Partnership, LP (the “Operating Partnership”), the operating partnership and wholly owned subsidiary of Piedmont Realty Trust, Inc. (the “Company”), issued $230,000,000 principal amount of its 2.875% Exchangeable Senior Notes due 2031 (the “Notes”), which mature on February 1, 2031, pursuant to an indenture, dated as of September 17, 2026, among the Operating Partnership, the Company and U.S. Bank Trust Company, National Association, as trustee (the “Indenture”). The Notes are fully and unconditionally guaranteed by the Company. Interest on the Notes is payable semi-annually on February 1 and August 1 of each year, commencing February 1, 2027. The Notes will bear interest at a rate of 2.875% per year. Pursuant to a purchase agreement entered into among the Operating Partnership, the Company and the representatives of the initial purchasers of the Notes, dated September 14, 2026, the Operating Partnership granted to such initial purchasers an option to purchase up to an additional $30,000,000 principal amount of Notes (the “Option Notes”). The Notes issued on September 17, 2026 include $30,000,000 aggregate principal amount of Option Notes.
The Notes and the guarantee of the Company are the senior, unsecured obligations of the Operating Partnership and the Company, respectively, and rank equal in right of payment with existing and future senior, unsecured indebtedness of the Operating Partnership and the Company, respectively, senior in right of payment to existing and future indebtedness of the Operating Partnership and the Company, respectively, that is expressly subordinated to the Notes and the guarantee, respectively, and effectively subordinated to existing and future secured indebtedness of the Operating Partnership and the Company, respectively, to the extent of the value of the collateral securing that indebtedness.
Before November 1, 2030, noteholders will have the right to exchange their Notes only upon the occurrence of certain events. From and after November 1, 2030 noteholders may exchange their Notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date. The Operating Partnership will have the right to elect to settle exchanges either entirely in cash or in a combination of cash and shares of the Company’s common stock. The kind and amount of consideration due upon exchange will be determined based on the exchange value of the Notes, measured proportionately for each trading day in an “Observation Period” (as defined in the Indenture) consisting of 60 trading days, and settled following the completion of that Observation Period. The consideration due in respect of each trading day in the Observation Period will consist of cash, up to at least the proportional amount of the principal amount being exchanged, and any excess of the proportional exchange value for that trading day that will not be settled in cash will be settled in shares of the Company’s common stock. The initial exchange rate is 79.0514 shares of the Company’s common stock per $1,000 principal amount of Notes, which represents an initial exchange price of approximately $12.65 per share of the Company’s common stock. The exchange rate and exchange price will be subject to customary adjustments upon the occurrence of certain events. In addition, if certain corporate events that constitute a “Make-Whole Fundamental Change” (as defined in the Indenture) occur, then the exchange rate will, in certain circumstances, be increased for a specified period of time.
The Operating Partnership may redeem the Notes, in whole or in part (subject to certain limitations described below), at the Operating Partnership’s option at any time, and from time to time, on or after August 6, 2029 and on or before the 60th scheduled trading day immediately before the maturity date, but only if certain liquidity conditions are satisfied and the last reported sale price per share of the Company’s common stock exceeds 130% of the exchange price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Operating Partnership sends the related redemption notice; and (ii) the trading day immediately before the date the Operating Partnership sends such redemption notice (a “provisional redemption”). In addition, the Notes will be redeemable, in whole or in part (subject to certain limitations described below), at the Operating Partnership’s option at any time, and from time to time, to the extent necessary to preserve the Company’s status as a real estate investment trust for U.S. federal income tax purposes (a “REIT preservation redemption”), or if less than 10% of the Notes are outstanding, in each case, so long as certain liquidity conditions are satisfied. However, the Operating Partnership may not redeem less than all of the outstanding Notes in a provisional redemption or a REIT preservation redemption unless at least $100.0 million aggregate principal amount of Notes are outstanding and not called for redemption as of the time the Operating Partnership sends the related redemption notice. The redemption price will be a cash amount equal to the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. In addition, calling any Note for redemption will constitute a Make-Whole Fundamental Change with respect to that Note, in which case the exchange rate applicable to the exchange of that Note will be increased in certain circumstances if it is exchanged after it is called for redemption.
If certain corporate events that constitute a “Fundamental Change” (as defined in the Indenture) occur, then, subject to a limited exception for certain cash mergers, noteholders may require the Operating Partnership to repurchase their Notes at a cash repurchase price equal to the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date. The definition of Fundamental Change includes certain business combination transactions involving the Company and certain de-listing events with respect to the Company’s common stock.
