v3.26.1
Derivative Instruments
 6 Months Ended
Jun. 30, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments Derivative Instruments
Risk Management Objective of Using Derivatives

In addition to operational risks which arise in the normal course of business, Piedmont is exposed to economic risks such as interest rate, liquidity, and credit risk. From time to time, Piedmont has entered into derivative financial instruments, specifically interest rate swap agreements, to manage interest rate risk exposure arising from current or future variable rate debt transactions. Piedmont’s objective in using interest rate derivatives is to add stability to interest expense and to manage its exposure to interest rate movements.

Cash Flow Hedges of Interest Rate Risk

Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for Piedmont making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

During the six months ended June 30, 2026, Piedmont entered into three interest rate swap agreements in conjunction with the recast and upsize of the $400 Million Unsecured 2026 Term Loan (see Note 3 above) to hedge $200 million of the principal balance through June 1, 2028. Piedmont's interest rate swap agreements are designated as effective cash flow hedges and are designated using SOFR. As of June 30, 2026, the maximum length of time over which Piedmont is hedging its exposure to the variability in future cash flows for forecasted transactions is 23 months.

A detail of Piedmont’s interest rate derivatives outstanding as of June 30, 2026 is as follows:

Interest Rate Derivatives:Number of Swap AgreementsAssociated Debt InstrumentNotional Amount
(in millions)		Effective DateMaturity Date
Interest rate swaps3
$400 Million Unsecured 2026 Term Loan
$200 6/1/20266/1/2028

Piedmont presents its interest rate derivatives on its consolidated balance sheets on a gross basis as interest rate swap assets and interest rate swap liabilities. A detail of Piedmont’s interest rate derivatives on a gross and net basis as of June 30, 2026 and December 31, 2025, respectively, is as follows (in thousands):

Interest rate swaps classified as:June 30,
2026		December 31,
2025
Gross derivative assets$530 $— 
Gross derivative liabilities— (111)
Net derivative asset/(liability)$530 $(111)
The gain/(loss) on Piedmont's interest rate derivatives, including previously settled forward swaps, that was recorded in OCI and the accompanying consolidated statements of operations as a component of interest expense for the three and six months ended June 30, 2026 and 2025, respectively, is as follows (in thousands):

 Three Months EndedSix Months Ended
Interest Rate Swaps in Cash Flow Hedging RelationshipsJune 30,
2026		June 30,
2025		June 30,
2026		June 30,
2025
Amount of gain recognized in OCI$503 $419 $498 $178 
Amount of previously recorded loss reclassified from OCI into interest expense
$(509)$(283)$(1,101)$(72)
Total amount of interest expense presented in the consolidated statements of operations
$(31,874)$(31,954)$(63,803)$(63,631)
Total amount of loss on early extinguishment of debt presented in the consolidated statements of operations
$— $(7,500)$— $(8,000)

Piedmont estimates that approximately $1.7 million will be reclassified from OCI as an increase to interest expense over the next twelve months. Additionally, see Note 5 for fair value disclosures of Piedmont's derivative instruments.

Credit-risk-related Contingent Features

Piedmont has agreements with its derivative counterparties that contain a provision whereby if Piedmont defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then Piedmont could also be declared in default on its derivative obligations. If Piedmont were to breach any of the contractual provisions of the derivative contracts, it could be required to settle its liability obligations under the agreements at their termination value of the estimated fair values plus accrued interest. However, as of June 30, 2026, all of Piedmont's net interest rate swap agreements are in an asset position. Additionally, Piedmont has rights of set-off under certain of its derivative agreements related to potential termination fees and amounts payable under the agreements, if a termination were to occur.