Orion Properties Inc. Second Quarter 2025 Earnings Release Overview and Key Announcements The company announced significant leasing, asset sales, increased FFO guidance, and a Q3 dividend - Completed 639,000 square feet of leasing year-to-date, including 179,000 in Q2 and 80,000 subsequent to quarter end13 - Sold four vacant properties during the second quarter for an aggregate price of $26.9 million17 - Increased the 2025 Core FFO guidance range and lowered the 2025 Net Debt to Adjusted EBITDA range2 - The company's strategic priorities include leasing, monetizing non-core assets, and shifting the portfolio toward dedicated use assets (DUAs)3 Financial Performance The company reported decreased Q2 revenue and Core FFO but an improved net loss compared to the prior year Second Quarter 2025 Financial Results Q2 2025 vs Q2 2024 Financial Results | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Revenues | $37.3 million | $40.1 million | | Net Loss Attributable to Common Stockholders | $(25.1) million | $(33.8) million | | Net Loss per Share | $(0.45) | $(0.60) | | Core FFO | $11.5 million | $14.2 million | | Core FFO per Diluted Share | $0.20 | $0.25 | Q2 2025 Key Metrics | Metric | Value | | :--- | :--- | | FFO | $8.9 million ($0.16/share) | | EBITDA | $(1.1) million | | EBITDAre | $17.5 million | | Adjusted EBITDA | $18.0 million | | Net Debt to Annualized YTD Adjusted EBITDA | 6.93x | - The company incurred $0.6 million in demolition costs during the first six months of 2025, which were excluded from Core FFO and Adjusted EBITDA calculations4 Consolidated Financial Statements - As of June 30, 2025, total assets were $1.29 billion, down from $1.34 billion at year-end 2024, while total liabilities decreased to $558.9 million64 Statement of Operations Summary (Three Months Ended June 30) | Line Item | 2025 | 2024 | | :--- | :--- | :--- | | Total Revenues | $37.3M | $40.1M | | Total Operating Expenses | $55.2M | $64.8M | | Net Loss | $(25.1)M | $(33.8)M | | Net Loss per Share | $(0.45) | $(0.60) | Non-GAAP Reconciliations Non-GAAP Performance (Three Months Ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | FFO | $8.9M | $10.9M | | Core FFO | $11.5M | $14.2M | | FAD | $(6.7)M | $7.8M | | Adjusted EBITDA | $18.0M | $20.5M | Operational Performance The company executed significant leasing and disposition activities during and subsequent to the second quarter Leasing Activity Q2 2025 Leasing Transactions | Location | Type | Square Feet | Term | | :--- | :--- | :--- | :--- | | Parsippany, NJ | New Lease | 46,000 | 15.7 years | | Plano, TX | New Lease | 23,000 | 7.6 years | | The Woodlands, TX | Renewal | 27,000 | 2.0 years | | Indianapolis, IN | Renewal | 83,000 | 1.5 years | - Subsequent to quarter end, the company completed a new 5.4-year, 80,000 square foot lease at its property in Kennesaw, Georgia6 Disposition Activity - During Q2 2025, four vacant properties totaling 434,000 square feet were sold for an aggregate gross price of $26.9 million7 - As of August 6, 2025, the company has agreements to sell five additional operating properties for a total gross price of $56.9 million7 Portfolio and Capital Structure The company's portfolio comprised 66 properties with a 77.4% occupancy rate, supported by $257.7 million in liquidity Real Estate Portfolio - The portfolio consisted of 66 Operating Properties and a 20% interest in the Arch Street Joint Venture8 Portfolio Statistics as of June 30, 2025 | Metric | Value | | :--- | :--- | | Annualized Base Rent | $118.9 million | | % ABR from Investment-Grade Tenants | 68.5% | | Occupancy Rate | 77.4% | | Weighted Average Remaining Lease Term | 5.5 years | - The Arch Street Joint Venture properties had an Occupancy Rate of 100% and a Weighted Average Remaining Lease Term of 6.8 years9 Balance Sheet and Liquidity - Total debt as of June 30, 2025 was $509.0 million, primarily comprising a $355.0 million CMBS loan and $110.0 million drawn on the credit facility revolver10 - The company had $257.7 million of liquidity, consisting of $17.7 million in cash and cash equivalents and $240.0 million of available capacity on its credit facility revolver11 Shareholder Returns and 2025 Outlook The company declared a Q3 dividend and raised its full-year 2025 guidance for Core FFO and Net Debt to Adjusted EBITDA Dividend Declaration - A quarterly cash dividend of $0.02 per share for the third quarter of 2025 was declared, payable on October 15, 2025, to stockholders of record as of September 30, 202512 Updated 2025 Guidance Improved 2025 Guidance | Metric | Prior 2025 Guidance | Improved 2025 Guidance | | :--- | :--- | :--- | | Core FFO per share | $0.61 - $0.70 | $0.67 - $0.71 | | Net Debt to Adjusted EBITDA | 8.0x - 8.8x | 7.3x - 8.3x | - The 2025 General and Administrative Expense guidance range remains unchanged at $19.5 million to $20.5 million15 Supplemental Information This section provides definitions for key non-GAAP measures and operational terms, along with forward-looking statements and risk factors Definitions of Key Terms - The report provides detailed definitions for non-GAAP measures including FFO (Funds from Operations), Core FFO, FAD (Funds Available for Distribution), EBITDAre, and Adjusted EBITDA19273234 - Definitions for operational metrics such as Annualized Base Rent, Occupancy Rate, and Investment-Grade Tenants are also included to provide clarity on portfolio metrics234552 Forward-Looking Statements and Risk Factors - The report contains forward-looking statements regarding future events, financial conditions, and operations, which are subject to various risks and uncertainties59 - Key risks identified include rising interest rates, inflation, oversupply of office space, and changes in workplace practices such as remote and hybrid work arrangements60 - Additional risks include tenant defaults, ability to re-let vacant space on favorable terms, and the risk of failing to maintain REIT income tax qualification6062
Orion Office REIT (ONL) - 2025 Q2 - Quarterly Results