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Piedmont (PDM) Buys Office Property, Signs Lease With WeWork

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Piedmont Office Realty Trust, Inc. (PDM - Free Report) recently announced that it has acquired an 18-story office building, Galleria 100, and a 1.5-acre-development parcel located at the mixed-used development of The Galleria in Northwest Atlanta. The company has shelled out $95.1 million for this acquisition.

The acquisition complements the company’s ownership of the adjacent Galleria 200 and Galleria 300 properties which are currently under development. Further, it enables Piedmont to expand its footprint to 1.3 million square feet in the growing submarket.

The property, spanning 414,000 square feet of space, is 91% leased. Per management, the buyout is in line with the company’s strategy to acquire properties and concentrate ownership in strategic markets. 

In a separate press release, the company announced that it has signed a lease with WeWork for the latter’s inaugural lease in Orlando, FL. This also marks WeWork’s entry into the market.

Piedmont has secured a lease for three floors at 200 South Orange Avenue, also known as SunTrust Center. The Class Atrophy tower, located in downtown Orlando, is slated to open in early 2020.

WeWork will occupy more than 70,000 square feet providing workspace for more than 1,000 members. Further, members will have access to state-of-the-art fitness center and conference space at the property.

Piedmont had announced a comprehensive redevelopment program to enhance the office tower with significant upgrades, including a full lobby renovation, new rooftop terrace and a food hall offering multiple cuisines.

Notably, in case of office REITs, although an improved economy, a solid job-market environment and healthy corporate profit are raising expectations, there is likely to be a greater balance in the market, going forward, with comparatively higher levels of new supply.

Piedmont currently carries a Zacks Rank #3 (Hold). Shares of Piedmont have improved 10.8% in the past six months, while its industry rallied 9.4%.


Stocks to Consider

Better-ranked stocks from the real-estate space include Host Hotels & Resorts, Inc. (HST - Free Report) , PS Business Parks, Inc. and OUTFRONT Media Inc. (OUT - Free Report) . Each of these stocks carries a Zacks Rank of 2 (Buy), currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Host Hotels & Resorts funds from operations (FFO) per share estimates for the ongoing year have been revised marginally upward to $1.80 in the last 30 days.

PS Business Parks’ Zacks Consensus Estimate for 2019 FFO per share moved marginally north to $6.59 in the past two months.

OUTFRONT Media’s FFO per share estimates for the current year has been revised marginally upward to $2.29 in a week’s time.

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