Orion Office REIT (ONL) - 2025 Q3 - Quarterly Results

Financial Performance - Total revenues for Q3 2025 were $37.1 million, down from $39.2 million in Q3 2024[4] - Net loss attributable to common stockholders was $(69.0) million, or $(1.23) per share, compared to $(10.2) million, or $(0.18) per share in the same quarter of 2024[5] - Core FFO for Q3 2025 was $11.0 million, or $0.19 per diluted share, down from $12.0 million, or $0.21 per diluted share in Q3 2024[4] - Total revenues for Q3 2025 were $37,122,000, a decrease of 5.3% from $39,178,000 in Q3 2024[69] - Net loss attributable to common stockholders for Q3 2025 was $69,035,000, compared to a net loss of $10,217,000 in Q3 2024, reflecting a significant increase in losses[69] - Funds from Operations (FFO) attributable to common stockholders for Q3 2025 was $6,553,000, down from $10,122,000 in Q3 2024, representing a decrease of 35.5%[71] - Core FFO attributable to common stockholders for Q3 2025 was $11,007,000, compared to $12,027,000 in Q3 2024, reflecting an 8.4% decline[71] - Adjusted EBITDA for Q3 2025 was $17,394,000, down from $19,083,000 in Q3 2024, indicating a decrease of 8.9%[76] Leasing and Sales Activity - The company completed 919,000 square feet of leasing year-to-date, including 303,000 square feet in Q3 2025[1] - Eight properties were sold year-to-date for $64.4 million, including three properties in Q3 for $21.8 million[1] - The company has agreements in place to sell four operating properties for an aggregate gross sales price of $46.6 million[9] Financial Ratios and Guidance - The company improved its 2025 guidance for Core FFO per share to $0.74 - $0.76, up from the prior guidance of $0.67 - $0.71[17] - The company's net debt to annualized year-to-date adjusted EBITDA was 6.75x[5] - The Interest Coverage Ratio for Q3 2025 was 2.33x, down from 2.47x in Q3 2024, indicating a decline in coverage[79] - The Fixed Charge Coverage Ratio for Q3 2025 was 2.29x, compared to 2.43x in Q3 2024, reflecting a decrease in coverage[79] - The Company expects a Net Debt to Adjusted EBITDA ratio between 6.7x and 7.2x for 2025[88] Assets and Liabilities - Cash and cash equivalents increased to $32,639,000 as of September 30, 2025, compared to $15,600,000 at the end of 2024[67] - Total assets decreased to $1,222,793,000 as of September 30, 2025, down from $1,336,422,000 at the end of 2024[67] - The company reported a total of $985,932,000 in net real estate investments as of September 30, 2025, a decline from $1,104,546,000 at the end of 2024[67] - The accumulated deficit increased to $491,463,000 as of September 30, 2025, compared to $384,348,000 at the end of 2024[67] - Net Debt as of September 30, 2025, was $475,864,000, a decrease from $502,304,000 at the end of 2024, representing a reduction of 5.3%[81] Expenses - Total operating expenses for Q3 2025 were $100,412,000, up from $41,129,000 in Q3 2024, primarily due to impairments of $63,698,000[69] - Capital expenditures and leasing costs for Q3 2025 amounted to $18,283,000, significantly higher than $6,057,000 in Q3 2024[72] - General & Administrative Expenses are anticipated to be between $19.5 million and $20.0 million for 2025[88] Impairments and Losses - Impairment of real estate assets for Q3 2025 was $63,698,000, with no impairments reported in Q3 2024[76] - The company experienced a loss on extinguishment of debt, netting $1,078,000 in Q3 2025[69] Future Projections - Diluted net loss per share attributable to common stockholders is projected to be between $(0.58) and $(0.56)[90] - FFO attributable to common stockholders per diluted share is expected to range from $0.51 to $0.53[90] - Annualized Year-to-Date Adjusted EBITDA for 2025 is projected at $70,451 million, compared to $82,849 million for the previous year[84] Other Financial Metrics - The Occupancy Rate is calculated as the sum of Occupied Square Feet divided by Rentable Square Feet, indicating the utilization of the company's properties[55] - The Unencumbered Asset Ratio decreased to 54.5% from 58.5%[84] - The company calculates Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate ("EBITDAre") in accordance with Nareit's definition, which includes adjustments for interest expense, income tax expense, depreciation, and impairment write-downs on real estate[30] - Adjusted EBITDA is used as a non-GAAP measure to evaluate operating performance, excluding non-routine items and certain non-cash items, providing a clearer view of the company's portfolio performance over time[31] - Funds Available for Distribution ("FAD") is defined as Core FFO adjusted for capital expenditures and certain non-cash items, reflecting the company's ability to fund its dividend[34] - Nareit Funds from Operations ("Nareit FFO") is adjusted for gains or losses from real estate asset dispositions and depreciation, providing a measure of operating performance[36] - Core FFO excludes items that do not reflect ongoing operating performance, allowing for better comparison with other publicly-traded REITs[38] - Net Operating Income ("NOI") represents total revenues less property operating expenses, excluding certain costs, and is used to evaluate operating performance[54] - Net Debt is calculated as Adjusted Principal Outstanding minus cash and cash equivalents, providing insight into the company's liquidity and financial flexibility[52]